"A few weeks ago, the market delivered its verdict on the relative future prospects of Apple and Microsoft.
Apple's prospects are better, the market said. And in the past few weeks, that vote has only become more decisive.
The market still thinks Microsoft's long-term prospects are pretty good, though. The stock is trading at a respectable 14X P/E. The company has cash flow gushing out of its ears. The consensus seems to be that Microsoft will keep growing, just more slowly than Apple.
But, increasingly, even this seems like wishful thinking. (...)
The Future Will Be PC-Centric? Only In Microsoft's Dreams
As recently as a few years ago, Microsoft was still arguing that the future would be Windows-centric. Sure, there would be millions of connected devices, the company said, but they would all orbit around the desktop PC, which would remain the center of the personal tech universe (and, thus, remain an ongoing source of immense "platform" profits). The explosive uptake of iPhones, iPads, and Android-based devices is increasingly making this view seem preposterous.
The desktop PC isn't the center of anyone's universe anymore. The Internet is. And the Internet doesn't require Windows. (...)
And Now On To Office
And then there's Office, the other huge source of Microsoft's profits.
Google has launched an Internet-centric version of Office: Google Apps. For now, Google Apps is inferior to Office for everything except collaboration. But it has all the hallmarks of a classic disruptive technology.
Specifically, Google Apps is cheaper, easier, and more convenient to use than Microsoft Office. How do we know this? Because Google Apps is taking over the low-end of the market. (...)
Right now, the investors are concluding that Microsoft will gradually become the equivalent of a technology utility--a boring but necessary provider of the software that runs the world's business community. A smaller, more optimistic crowd is still arguing that, one day, Microsoft will be able to turn its fortunes around, and fight its way back into an industry leadership position.
What almost no one is talking about is a third possibility, one that becomes more likely by the day: The possibility that, a couple of years down the road, Microsoft's business may just completely collapse." (Fonte: SFGate)