With a single verdict in its patent infringement case against South Korean tech giant Samsung, Apple, the world's largest company, was able to widen its lead by immediately crippling two of its rivals — the other being search giant Google.
However, in an interesting twist of irony, the battle has opened a door of opportunity for Microsoft, a company mired in the collective shadows of all three giants.
The angle is, since Microsoft is a “non-Android” platform, developers could now consider it a worthy alternative — one that lacks the mess and clutter created by the verdict.
It seems that for “Mr. Softy,” stars are now aligning. You might even say that, “Windows are opening.” The only question is, can Microsoft seize the opportunity?
Some might suggest that the software giant has already taken some risks, having broken dramatically from its previous model by jumping into hardware with its Surface tablet. Yet at this point, failure is not an option. Rivals are waiting for it to fall flat on its face. And although it may be hard to fathom, perhaps even its once proud partners Dell and Hewlett-Packard could be secretly rooting for it to fail.
Many investors will claim it all hinges on Windows 8. The product has yet to hit the shelves, but that hasn’t stopped naysayers from declaring it a massive failure. But is that really what’s important at the moment — particularly when considering the value that the company’s current share price presents?
The launch may not be as crucial as some might think. At least not as important to how the company maneuvers over the long haul, as it attempts to engage the consumer while maintaining its presence in enterprise software.
The fact is, if investors are unable to see value in Microsoft ahead of these product launches, the stock may face some downward pressure. With a paltry forward price-to-earnings ratio of $9, it is not unreasonable to think that there is a huge bet being made that the company will indeed fail. At $30, the stock is up 19 percent on the year. While that not a horrible premium, it pales in comparison to Apple’s 60 percent surge over a comparable period.
Comparing the potential of shares in Microsoft and Apple, together with the fact that Google and Samsung both might suffer losses in market share, it is possible to think Windows 8 just might be able to add an additional $8 to Microsoft’s share price — representing an additional premium of 26 percent. And that’s being conservative.
Absent a crystal ball, it’s hard to say how successful Windows 8 will be. However, it seems misguided that people can call it a colossal failure before even setting eyes on the product.
There is evidence to support the idea that this could be Microsoft’s best operating system since Windows 95, which revolutionized the user experience. Even if it falls short of that standard, I have to think demand will be higher than most anticipate.
The RIMM Shot
Although Apple and Google continue to get all of the press coverage, Microsoft has been working hard to expand Windows outside the chassis of the traditional PC and into the nuts and bolts of mobility, which includes tablets and smartphones. All of this makes it a prime candidate to acquire a company such as Research In Motion, since a shift to mobile has been its biggest challenge.
I think RIMMjust might be a value alternative to overcoming what has been Microsoft’s biggest roadblock since it decided it was interested in phones. However, this much is certain: with a chastened Google and Samsung, Microsoft has an opportunity to reinvent itself in a manner that former highfliers like AOL and Yahoo wish they had. The company has no choice but to get it right — and I believe it will.
Who would have ever thought this gift would have come from Apple?
—By TheStreet.com Contributor Richard Saintvilus
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At the time of publication, Richard Saintvilus was long Apple's stock and held no position in any of the stocks mentioned.