Windows 8: Apple and Google Should Fear Microsoft
Alvin is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The tablet world will erupt into a giant OS war later this year, when Microsoft (NASDAQ: MSFT) launches Windows 8. Currently, Apple (NASDAQ: AAPL) and the iPad have a 70% global tablet market share and tablets running Google (NASDAQ: GOOG) Android account for almost the rest (digitimes). Despite the challenges of fighting entrenched competition, Microsoft and Intel are aiming to reduce the iPad’s market share to less than 50% by 2013 (digitimes). That is an ambitious goal. However, as history shows, Microsoft and Intel should not be taken lightly.
One of the first things people will notice with Windows 8 is the use of the Metro UI. The desktop is still there, but clicking on start now brings up the Metro UI with all of the programs (apps). Furthermore, Windows 8 boots not into the desktop, but into Metro. While the switch from the traditional start menu to Metro definitely feels strange at first, the integration is clever and actually smooth. By integrating Metro into Windows 8, Windows 8 becomes a versatile OS capable of running smoothly on tablets, laptops, and desktops. This is in stark contrast to Apple, which uses two different OS’s for its mobile devices and Macs. Also, while Android does run on x86, Android is not meant for use in laptops or desktops. In addition, Android has some problems with fragmentation.
By having a single OS across platforms, Microsoft has an advantage with cross-platform applications. Any program that can be installed on a Windows 8 laptop or desktop can be installed on a tablet too. This allows Microsoft to leverage its large base of Windows users. Furthermore, since Windows 8 is a full Windows OS, Windows 8 tablets can run legacy programs and users can install third party programs or add files directly. For example, users can download games from the internet without having to go through the Windows Store. On the contrary, iPad users can only install apps found in the App Store and Android users can only install apps compatible with Android. By making Windows 8 compatible with legacy programs, Microsoft essentially leapfrogs Apple and Google in apps. While Apple and Google have thousands of apps, there are probably millions of programs available for Windows. For clarification, Microsoft will also be releasing Windows RT (Windows 8 specifically designed for ARM chips), which will not be compatible with the other Windows versions and legacy programs.
Ironically, another advantage of Microsoft is Apple’s vertical integration strategy. Basically, Apple does not license their software. For example, Apple does not allow Dell or HP to use the iOS to design other iPads. While vertical integration has contributed to Apple’s success, it has also caused Apple to make a lot of enemies. Toshiba, Dell, Lenovo, Acer, HP, Asus, and others are planning to release a total of 32 Windows 8 tablets in 2012. The tablets will run on Intel or AMD chips (informationweek). Combined with Microsoft, that is a lot of marketing power that Apple will have a very tough time overcoming. Strangely enough, Google might be in better position than Apple because they license Android for free.
Anyway, the different hardware vendors will offer Windows 8 tablets with different specs, similar to what is seen in the PC industry today. While Apple considers the iPad a post-PC device, tablets are still basically computers and consumers like choices with computers. Consumers want to be able to pick their choice of screen size, processor, and memory. Looking back, it was Apple’s refusal to open up its system to others that caused the Macintosh to lose to Windows and become a niche product. If Apple is not careful, the same thing will happen to the iPad. Apple might be able to solve this problem, if they license iOS. However, Apple has always been averse to licensing its software.
In summary, Windows 8 is a huge threat to the iPad and, to a lesser extent, Android tablets. Windows has a dominant market share in PCs and Microsoft is looking to extend that dominance into tablets by using Windows 8’s strong cross-platform integration. Furthermore, many hardware manufacturers have plans to release Windows 8 tablets. That being said, Windows 8 is not perfect. Since it is a full OS, it requires more resources to operate than iOS or Android. Hence, it might not be as portable as an iPad or Android based tablet. However, Windows 8 is a serious threat. Windows defeated Macintosh for a good reason and Apple and Google would do well not to forget and underestimate Microsoft. I consider Microsoft a good buy.
Motley Fool newsletter services recommend Apple, Google, and Microsoft. The Motley Fool owns shares of Apple, Google, and Microsoft. iamgreatness has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.