Microsoft Corporation (MSFT) Is Trying to Become Apple Inc. (AAPL)

Google Inc (NASDAQ:GOOG) adopts Microsoft’s strategy

Google Inc (NASDAQ:GOOG) has adopted Microsoft Corporation (NASDAQ:MSFT)’s classic strategy when it comes to the mobile market, and has seen similarly successful results. In just the last few years, Android has emerged as the world’s dominant mobile operating system — it powers 75% of the planet’s smartphones.

Google Inc (NASDAQ:GOOG) has even one-upped Microsoft in this regard — instead of charging a licensing fee, Google gives Android for free. This has led to Android being the go-to operating system for the world’s cheapest smartphones.

Of course, this unorthodox strategy has attracted criticism. Venture capitalist Roger McNamee has been a vocal critic of Google, calling Android’s dominance “profitless prosperity.”

Google Inc (NASDAQ:GOOG) does benefit from Android, although it’s more difficult to see. Rather than take a cut from the sale of every handset, Android helps Google get more users onto its web services — gmail, Google+, Google Docs. Those services are free to users, but Google sells advertising based on them.

There are other factors in play, but Android’s market share growth over the last two years has coincided with a nearly 75% rally in the stock.

Is Microsoft desperate?

Trying to become Apple-lite doesn’t seem like a recipe for success. Although a more closed system offers a higher degree of quality, open systems have consistently dominated in the long-run: the variety of hardware configurations and price points leads to higher overall market share.

I’ve been bullish on Microsoft Corporation (NASDAQ:MSFT) in the past based on the promise of its Azure cloud computing platform, but this reorganization plan seems like the company is setting itself up for failure.

Gartner expects Android to fully supplant Windows as the world’s dominant operating system within four years. With Microsoft changing its long-standing philosophy, that projection seems likely.

The article Microsoft Is Trying to Become Apple 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 and Google. The Motley Fool owns shares of Apple, Google, 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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