I just upgraded my operating system on most of my computers to Windows 7, and over the weekend, I can say it has been the best software I bought in a long time! Well, of course the horrible RAM-hogging Vista may have contributed to that… kind of like living in a cheap motel for so long then getting an upgrade to the suite at the Four Seasons Maui, you can’t help but notice the improvements. I think the best improvement has come to my 2-year-old HP, which only sports 2 RAM. I turned off Aero on that machine because it was just eating up all my resources… it came to the point where it took 10 minutes to boot! So who knows, maybe Gates decided to make Vista a piece of crap so that we would all be forced to upgrade to 7 and then venerate him as the computer-deity he once was. Anyway, I’m now enjoying faster everything- faster bootup (about 30 seconds now!), faster internet browsing, faster program loading, better desktop navigating thus faster working.
Well, whatever you’re a fan, hater, or consumer, the release of 7 sparks an interesting case for anyone investing in Microsoft Corporation [[msft]] and Apple Inc. [[aapl]] . Let’s face it, for the past decade, AAPL has had the superior operating system, but MSFT managed to keep its customers; and I’m sure as great as their ad-campaign was at humoring us to make the switch, AAPL’s rep of not being consumer-friendly (or too expensive, or reserved for the nerds) probably was their biggest obstacle at acquiring the marketshare they truly were seeking. Hmmm… maybe AAPL was spending too much time in the early 90s trying to develop speech recognition software, a bit too early for their time. Here’s a quick chart from earlier in the year on marketshare of the operating system battlefields….
So what does this mean for investors? Well, I think the release of Windows 7, MSFT is back! I mean, let’s hope their Zune experiment is done… they need to realize they should continue to do what they are good at, and that’s making operating systems for the masses. They are the WalMart of operating systems, you don’t see WalMart trying to make a gourmet restaurant chain. Anyway, i did some work and came up with these two charts that show the effects (if any) a major product release has on the Company’s stock price. Again, thinking from an investor’s perspective, if you own a considerable amount of shares you would be keenly interested in the Company’s product pipeline and release dates. See if you can get anything out of AAPL and MSFT through the years…
So what do we learn from this? Well, the obvious one is that whenever a Company releases a product that changes the rules of the industry, you want to invest longterm in them. AAPL was a popular stock through the late 90s, but it wasn’t until the arrival of the iPod that investors started to say, “hey, this Jobs guy can make us some money.” What do we also learn? When a previous industry hero reaches the climax of its growth stage, the investors in that company become too saturated. The marketcap gets too big and you have a bunch of investors who argue over the future of the Company and can’t decide whether its worth sticking around or not. This is the story of MSFT since its .com glory days. What we have is a bunch of bored investors who want something big, something game-changing, something with huge revenue potential (like an iPod, iTunes). If they keep releasing buggy software, MSFT looses the one thing it should spend a lot in protecting- their reputation. These of course are all correlations, so there could be other variables that effect the stock price.
Just view Windows 7 as a x-large can of Monster Soda for now. MSFT is an old man, once the energy wears off, we’ll see if he can continue the climb.
Well tomorrow I’m upgrading my tablet-pc to Windows 7, I expect this to elevate my laptop to godly mode. If not, then I’ll just wait for Mac’s tablet. If you’re a Vista user, please do yourself a favor and just upgrade to 7. It’s well worth it. When you do, let me know what you like about it!
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Someone wanted me to do a review on Win7 w/ touchscreen computers. Yay! i ohly have the HP though.
Being in the industry, I can tell you IT is moving to it in a big way in 2010.
It will displace XP withing 2 years but of course will probably become the new XP where everyone just stays with it for a long time.
MSFT has shown a few tricks lately(Project Nadal, etc) but can they keep it up, who knows.
Windows mobile is terrible and a new OS by the end of 2010 is not good enough. Unfortunately that’s where the growth is.
Your chart contradicts your thesis, imo, as it shows a steadily decreasing market share for Windows, starting in the glory days of XP.
Also, where did you come up with AAPL’s rep for not being consumer-friendly…when that is their calling card!? Easy-to-use, consumer-friendly, safe is the name of the game with OS X (also, more expensive, but you do get what you pay for).
Apple has been steadily gaining in the consumer space; it is the corporate/business space where they absolutely no presence and thus will never be able to eclipse or even approach MSFT’s numbers.
That being said, Windows 7 is an excellent product…it is what Vista _should’ve_ been. So while it’s great, it will be hard for MSFT to overcome the fact that they dropped the ball on it the first time.
dpeezy, i’m speaking from their pre-ipod pre-MacBook days. software not compatible with OS making it tough for consumers to make the move. they are notorious for that. didn’t you live through that era? I’ve owned 2 Macs in my lifetime! i can’t believe i owned stock in AAPL back in 99!
XP was good, but win95 was my definition of a “game-changer”. The reason MSFT can’t move is because of that “crowded” effect. they need new life.
AAPL does have a problem with software compatibility that is still lingering. This is a problem in the corporate space. DPeezy is right to say that this is where they are lacking because as long as the software is not compatible with all the other business people on PC, they will never be able to switch over.
Anyone who has made the switch, however, from PC to Mac realizes that there is no reason to continue suffering with PC. Mac is a superior product…period! They are continually upgrading there software to be more compatible and comparable software is available in most cases. For artists of any kind there is no comparison. Mac’s operating system and software work better than PC in this platform. Open your minds people. Computer operating systems aren’t just for techies anymore.
Sorry for the cliche… but once you try Mac, you’ll never go back. The ubiquity of iPods and now iPhones will only reinforce the trend.
My only concern about AAPL is Jobs’ health, and the effects of that on the company’s performance.