Is It Too Late for Microsoft?


Get ready for another round of Apple (NAS: AAPL) versus Microsoft (NAS: MSFT) . First, it was Bill Gates versus Steve Jobs. Now, it's Steve Ballmer versus Tim Cook.

"We are trying to make absolutely clear we are not going to leave any space uncovered to Apple," Ballmer said at a partner conference in Toronto this week. "We are not leaving any of that to Apple by itself. Not going to happen. Not on our watch."

OK, but... Didn't this already happen? Didn't Ballmer mock the iPhone when it first came out? Didn't Microsoft pioneer and then abandon the tablet space? It's a little late to be taking Apple seriously, Mr. Ballmer.

Or is it? The history of the consumer technology industry shows that it's almost never too late for any competitor to make a serious comeback. Microsoft destroyed Netscape after ceding the browser market in its early days. Netflix buried Blockbuster when it devised a better system for DVD rentals. Google (NAS: GOOG) buried Yahoo! in U.S. search before Baidu took over the search market in China. Early leaders don't always stay ahead.

And that's a problem for Apple. See, despite its pedigree as author of what might be the greatest comeback story in the history of business, Apple is an early leader in at least two key markets: smartphones and tablets. Ballmer wants to knock the Mac maker from its comfy perches.

How far will he go? Windows 8, which comes out in the fall, could be a big winner for how it leverages common tools to help developers write code that runs across desktops, phones, and at least some versions of the forthcoming Surface tablet.

Hardware innovation could also come into play. According to tech blog Slash Gear, Ballmer acted coy when asked about the possibility of Microsoft designing its own branded Windows Phone. To date, Mr. Softy has relied on partners such as HTC and Nokia (NYS: NOK) in the same way that Google has come to depend on Samsung for Android devices.

An Apple a day
What strategy Microsoft chooses isn't as important as the very act of choosing to fight. Billions of dollars will be put to work in pursuit of further breakthroughs, which should deliver ever more advancements into the hands of users while fueling returns for investors in both stocks and many more. Indeed, these are the sorts of hidden winners we scout for in our Motley Fool Rule Breakers newsletter service. Want in? Click here for a 30-day free trial subscription.

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At the time thisarticle was published Fool contributor Tim Beyers is a member of theMotley Fool Rule Breakersstock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google, and Netflix at the time of publication. He also had a long-term call position in Netflix. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Apple, Baidu, Google, Microsoft, and Netflix. Motley Fool newsletter services have recommended buying shares of Apple, Netflix, Baidu, Microsoft, and Google. Motley Fool newsletter services have recommended creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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