Stick With Microsoft Corporation (MSFT), It Will Pay

Lessons are meant to be learned. Windows Vista faced uptake issues because, aside from being slow and having software compatibility bugs, it was also too complex for the layman user and presented incompatibility challenges even to hardware and peripheral devices. So obviously Microsoft Corporation (NASDAQ:MSFT) would make sure that Vista would be the last production gaffe to come from its offices, right? Not quite. But even as it’s marred by turbulence, Microsoft Corporation (NASDAQ:MSFT) is still a company you will want to keep for the long term.

Consider Microsoft Corporation (NASDAQ:MSFT) to be like a Cisco Systems, Inc. (NASDAQ:CSCO) in terms of longevity. Cisco, compared to other technology giants, is widely considered a glacial-paced investment. On May 15, The Open Globe reported the company’s released net income on a generally accepted accounting principles (GAAP) term was $2.5 billion, or $0.46 per share. The non-GAAP equivalent is $2.7 billion, or $0.51 per share. CNNMoney further reported that the company now hoards $47.7 billion cash, $1 billion more than in the previous quarter. In a media statement, CEO John Chambers noted Cisco Systems, Inc. (NASDAQ:CSCO) “slow, but steady economic environment.”

Yet like Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL), Cisco Systems, Inc. (NASDAQ:CSCO) is still widely invested in by many market watchers. This already attests to the confidence investors have in the company. Even as Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) grapple with the ‘problem’ of being the most overly-invested in stocks this side of AIG, this is a firm indication of the markets’ confidence in these entities.

Comparisons to New Coke

By the end of March, Windows 8 accounted for 3.6% of all Windows devices, versus Vistas 4.9% at the end of its fifth month.  For a system that already loses to Apple Inc. (NASDAQ:AAPL) for being less intuitive, whatever change Microsoft Corporation (NASDAQ:MSFT) implements to Windows needs to be incremental. Radicalism is bad for business. The Financial Times’ Andrew Hill, and indeed many investors, have compared it to the Cola wars debacle of 1985. The Coca-Cola Company (NYSE:KO) eventually came to the realization that the people weren’t as much appalled by the actual taste of the New Coke, but rather the idea of changing it at all–in essence sending the message what they’d been having all through was sub-standard.

What will Microsoft do?

Microsoft Corporation (NASDAQ:MSFT) needs to bully their way into the tablet market. By the end of the first quarter 2013, Microsoft Corporation (NASDAQ:MSFT)’s share of the tablet market was 1.8%. Global tablet sales have grown by an estimated 142% in Q1 year-over-year, and this offers an abundance of possibilities for growth. Microsoft’s share is too small for a market that is growing astronomically.  Unfortunately, this means that the growth potential is enormous for any company, including Microsoft’s competitors. Samsung currently holds 18% of the tablet market, while Apple leads with 40%.