Microsoft Corporation (MSFT), Apple Inc. (AAPL): Windows 8 Is Doing Just Fine

Microsoft Corporation (NASDAQ:MSFT) has taken a lot of heat over the changes it made to its new personal computer (PC) operating system (OS) Windows 8. However, the new software is selling at a decent clip and, more importantly, blurring the line between PC and mobile devices.

Changing its Stripes

Microsoft Corporation (NASDAQ:MSFT) is best known for its Windows PC operating system. Although it has other notable businesses, Windows is a key product and the one on which the company was founded. Every new release makes headlines.

When it first came out, Windows 8 was criticized over the changes Microsoft made, including removing the “start” button to which so many customers had grown accustomed. The company plans to alleviate some of these concerns with updates.

However, what many people don’t fully appreciate is the way in which Windows 8 blurs the line between PC and mobile device. Windows 8 looks and acts like the company’s mobile and tablet operating systems, including touch functionality. It is creating an ecosystem in which Windows users can grow comfortable across multiple devices.

A Multi-Pronged Effort

The company’s partnership with Nokia Corporation (ADR) (NYSE:NOK) on the Lumia phone is an equally important part of this effort. After Nokia gave up its own mobile OS, it partnered with Microsoft, receiving money up front and agreeing to design its much anticipated smart phone using Windows Mobile.

The best part about the Lumia, however, is how important the product is for Nokia. Since this is a make or break product, Nokia is going to put 110% behind this phone. Microsoft just needed a good showcase for its mobile OS. Good OS reviews should give Microsoft an in with companies looking to diversify away from a near-total reliance on Google Inc (NASDAQ:GOOG)‘s Android mobile OS.

Nokia, for its part, has a lot on its plate right now. It’s facing more competition in its emerging market stronghold and is trying to take on the industry giants in developed markets with a new phone. Sales have fallen in each of the last two years and in 2012 were around 40% below their 2007 peak. All but the most aggressive investors would be better off looking elsewhere for now.

Tablets

The look and feel of Windows 8 is also cloned on Microsoft Corporation (NASDAQ:MSFT)’s Surface tablet offering. That said, trying to take on Apple Inc. (NASDAQ:AAPL)‘s iPad and Samsung’s Galaxy tablet offering is a sure loser for Microsoft in the near term. Sales figures prove that out. However, Microsoft doesn’t need to be the industry giant to have a real business in the tablet space.