Microsoft Corporation (MSFT), Apple Inc. (AAPL) – Confirmed: Windows RT Is a Total Failure

Chanos reiterated that call earlier in the week at CNBC’s Delivering Alpha, and perhaps he’s right. Last quarter, Hewlett-Packard Company (NYSE:HPQ)’s PC shipments declined a staggering 20%. But with the move to Android and the focus on servers and other business segments, Hewlett-Packard Company (NYSE:HPQ) clearly understands that the Windows ecosystem has a dire future.

What does Windows RT’s failure mean?

With the failure of Windows RT, Microsoft’s future in the tablet industry is all but doomed. Granted, Microsoft still offers something no other company does — the hybrid tablet. But the market for such a device is relatively small, and will likely remain small for the foreseeable future.

As with smartphones, the tablet market seems poised to remain a two-horse race for the foreseeable future: Apple’s iOS against Google Inc (NASDAQ:GOOG)’s Android.

Apple Inc. (NASDAQ:AAPL)’s tablet market share has fallen, and should continue to fall, in the coming years. With Google Inc (NASDAQ:GOOG) giving Android away for free, Apple Inc. (NASDAQ:AAPL) simply cannot offer super cheap tablets like Hewlett-Packard Company (NYSE:HPQ)’s $170 Slate 7.

Still, the failure of Windows RT should benefit Apple in the near term. Although Google Inc (NASDAQ:GOOG) wins on customization and price, Apple Inc. (NASDAQ:AAPL) maintains its spot as the only company offering a premiere tablet experience.

Ultimately, although the iPhone remains the company’s workhorse product, Apple’s long-term future may lie with the iPad. With Windows RT falling by the wayside, that’s one less competing platform Apple need worry about.

Investing in Microsoft

If you’re holding Microsoft stock, you have to believe that the company will be able to replace its Windows empire with something else. That it isn’t to say that it can’t; hedge fund ValueAct argued that Azure, Microsoft’s public cloud product, will more than makeup for the decline of Windows.

But the failure of Windows RT suggests that Microsoft has no future in the mobile computing market. There will likely be desktop and laptop PCs running Windows for many years to come, but as more and more users switch to mobile devices, Microsoft’s Windows business will struggle.

The article Confirmed: Windows RT Is a Total Failure originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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