Microsoft Gets 'Scroogled'!
Palwasha is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
In retrospect, twenty-twelve was nothing less than a rollercoaster ride for tech investors. Tech stocks remained the darlings of the market, especially for the last half of the year. Giants like Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) reached new highs of $700 and beyond with Google is still hovering near that mark, Apple investors were left in utter disappointment by the stock's $200 fall despite the launch of a new phone (iPhone 5) and tablet (iPad Mini), as the year neared its end. Samsumg emerged as the biggest competitor and the most lethal threat to Apple's smartphones and tablets, so big that Apple had to fight a patent war with Samsung, which it won in the US courts though lost in Korea and Japan. BlackBerry maker Research in Motion (NASDAQ: BBRY) continued to lose market share, falling to lows never seen before. Nokia lost its long-held spot to Samsung as the top vendor of mobile devices in the world and abandoned its signature Symbian OS only to adopt Microsoft's Windows 8 OS.
The year was particularly good, if not great, for Microsoft (NASDAQ: MSFT) that rose from the ashes to touch new four highs during the year and also managed to regain some of its lost market share. Not only did it fly under investors' radar, but also caught attention of the biggest player in the industry, Google. At the rate which Windows 8 OS is being adopted, it is estimated that in the next five years, Microsoft could be holding a little under a quarter of the OS industry market share. You may become furious if I tell you straight up that Google feels intimidated by W8, but let me show you how this speculation may hold some water.
Google develops apps for its own OS, Android, and Apple's iOS. But guess what? They refuse to make the same for Windows. Clay Bavor, Google's Apps Product Management Director believes that Windows Phone and Windows 8 (adopted by Nokia and HTC in many of their latest, leading phones) don't have enough users. He says, "We have no plans to build out Windows apps. We are very careful about where we invest and will go where the users are but they are not on Windows Phone or Windows 8."
Google has received criticism time and again from both the consumer and business communities for hampering competition in an effort to maintain a monopolistic position in the industry. The company has come under the scrutiny of antitrust agencies in the US as well as Europe. Not just the smartphone manufacturers and OS developers, but many travel websites like Yelp and Expedia have also sued Google in the past for its monopolistic hold on web search.
Google's latest victim is Microsoft itself, as Google blocks Microsoft customers to have a proper access to its most-downloaded YouTube app on their Windows OS-run devices and also removes support for Microsoft's Exchange ActiveSync for new devices effective by the end of this month. Microsoft's Vice President, Dave Heiner subtly expressed his anger over Google's dominance, in a blot post here.
Wait, there's more bad news!
Another of Microsoft's cash cows is its internet browser, Internet Explorer, which has been under a severe attack for half a decade now. The Firefox browser by Mozilla Corporation took on Microsoft's Internet Explorer in the mid-2000s, slowly taking away its market share. IE is also struggling at the hands of Google Chrome's dominance in the space.
Mozilla, which was spun off from Netscape, has a long rivalry with Microsoft that goes back to the 90s when Microsoft's Internet Explorer killed AOL's Netscape. Mozilla is now a subsidiary of Mozilla Foundation which was created in 2003, after AOL decided to separate its operations from the dying Netscape. The Mozilla Foundation, by the way, also receives funding of hundreds of thousands of dollars for R&D from, guess who?
Yes, it's Google again!
A Snapshot of the Firefox OS
An article (linked here), the writer of which is a part of the Firefox OS developer team, cites reasons why the Firefox OS would make a mark in an already saturated OS market. That remains to be seen, however what's certain is that the mobile operating systems with smaller market shares (especially Microsoft's and RIM's) that are struggling to get past each other in a space well-crowded by Droids and Apples will have another competition to fight.
In a nutshell, Microsoft is likely poised to be the one to feel most pressure. Although, I'm not bearish on the company and feel its prospects look very attractive, I'm still conservatively bullish. Its tussle with the biggest tech company, Google, and its long-standing rivalry with Mozilla, also funded by Google, might put its survival at risk. Seems like Google scr*ws over another company again.
Watch out as Microsoft gets scroogled!
PalwashaS has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!