Microsoft Could Outshine Apple in Premium PC Market

Microsoft stock

Microsoft Corporation (NASDAQ:MSFT) impressed the tech world with its well-designed Surface devices. According to experts, the Surface is a true competitor of Apple’s Mac. Microsoft announced Surface in June 2012 as part of its efforts to integrate its Windows operating system with its own hardware. Apple continues to be a leader in the premium PC market. However, Microsoft is betting big on its Surface line to give a tough time to the iMac maker in the premium segment of the PC market.

Under the leadership of Satya Nadella – who took the CEO office from Steve Ballmer in 2014 –, the Redmond-based tech titan launched a completely new strategy to develop and sell computers and services. Undoubtedly, Nadella has Microsoft from a struggling tech firm into a Wall Street darling. The company’s stock price has surged more than 90% since February 2014 when Nadella was appointed as CEO. So far this year, MSFT is up more than 18%.

microsoft-surface pro

Microsoft Surface

Microsoft is introduced Surface to compete with Apple in the premium PC market.

The Surface family includes six main lines of devices: the Surface 3 hybrid tablet; the Surface Pro professional hybrid tablet; 13.5-inch Surface Laptop; the Surface Book notebook with a detachable screen; 28-inch all-in-one desktop Surface Studio that adjusts into a digital drafting table with stylus and on-screen Surface Dial support; and touch screen interactive whiteboard Surface Hub for collaboration.

Microsoft announced the next generation Surface Pro 4 and the Surface Book hybrid laptop in October 2015. Last year, the firm announced the Surface Studio and Surface Book. It unveiled the Surface Laptop and the fifth-generation Surface Pro in May.

Microsoft introduced the Surface Studio, a 28-inch all-in-one PC that ships with a standard Surface Pen, in October 2016.

Microsoft reported strong sales of its Surface devices in 2016. However, during the company’s third quarter March 31, Surface revenues dropped by 26% to $831 million compared to $1.1 billion in the same period last year. The Surface line contributed $4.3 billion to the firm’s revenues in the calendar year 2016.

On the other hand, Apple reported Mac revenue of $5.9 billion for its fiscal second quarter ended April 1, compared to $5.1 billion in the same period last year. The tech giant made more than $23 billion in 2016.

Last year, Microsoft Corporation (NASDAQ:MSFT) said that November was the company’s best month ever for consumer Surface sales. The Redmond-based firm claimed that professional users were converting to its high-end hybrid PCs – the Surface Pro 4 tablet, Surface Book laptop and Surface Studio desktop – due to “the disappointment of the new MacBook Pro.”

“More people are switching from Macs to Surface than ever before. Our trade-in program for MacBooks was our best ever, and the combination of excitement for the innovation of Surface coupled with the disappointment of the new MacBook Pro – especially among professionals – is leading more and more people to make the switch to Surface, like this,” Brian Hall from Microsoft Devices Marketing group said in a blog.

We believe that Microsoft would be a strong competitor to Apple in the premium PC market. With Surface Pro tablets and Surface Laptop, the Windows maker could outshine Apple in the lower-end and mid-range segments of the premium market. The iDevice maker has dropped the Apple Air notebook and hasn’t updated its MacBook line. So, there is a big opportunity for Microsoft to establish itself a top player in the lower and mid segments. However, Microsoft would take some time to gain a share from Apple in the higher-end segment of the premium PC market.

Apple isn’t Failing in Enterprise

Apple’s devices remain more popular among professionals.

A survey, conducted by Dimensional Research, showed that more and more professionals are adopting Mac and iPad. The study, which involved 300 IT professionals, managers, and executives, revealed that 99% use iPhones and iPads for office use, while 91% say they use Macs for personal tasks.

According to a report from CIO, there is an enough room in the enterprise for both Microsoft Corporation (NASDAQ:MSFT) and Apple. Both firms “continue to grow and succeed in consumer and enterprise markets” and “each company has taken a different road to enterprise adoption,” according to the report.

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