Can Microsoft Stay Relevant?

Microsoft (NASDAQ:MSFT) didn’t have the best year in 2012 for PC sales, and didn’t have the best past few months with its Surface tablets. Now, the tech giant could be depending on its newest tablet to keep the company relevant. The only problem is, not everyone is aware the company has a new tablet hitting the market.

Last year, PC sales slumped in the face of the ever-growing popularity of smartphones and tablets — two markets in which Apple (NASDAQ:AAPL) has been leading the way, though it has recently lost its grip on the smartphone market. Microsoft’s new Windows mobile OS and its own in-house manufactured devices were meant to help it compete better in this quickly evolving market, but so far, they haven’t exactly been a saving grace.

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And what’s worse, Microsoft is facing pressure in other parts of the industry. A significantly large part of Microsoft’s business comes from enterprise users. Windows-based PCs have long been powering offices and cubicles alike, but tablets have been changing the playing field, with Apple as the clear leader.

While Apple may not have as much dominance in the smartphone market as it once had, its iPads are still by far the most popular tablets on the market, and Apple has been increasingly pushing them as tools for business people and enterprise customers. Apple’s efforts threaten to nudge Microsoft out of one area in which it has previously thrived: business.

Microsoft’s Windows Phone recently overtook BlackBerry (NASDAQ:BBRY) as the third-most popular smartphone operating system in the U.S. during the last quarter, and it may be able to hold that lead if it builds enough of a following over the next few months, before the new BlackBerry devices reach U.S. shores, but that lead will likely prove insufficient in keeping Microsoft afloat, as it doesn’t stop Apple from chipping away.

So, Microsoft may have to rely on its tablets to keep its place in the computing market. Unfortunately, the Surface tablets haven’t been going over too well lately. They have been plagued by clunky names, a lack of popularity, over-the-top prices, misleading tech specs, bugs, a late entry into a heavily-saturated market, and even an inability to supply the tablet to stores.

Now, Microsoft is gearing up to launch its Surface Pro tablet, which runs on an Intel (NASDAQ:INTC) microprocessor and features a full version of Windows 8 Pro. This would allow the tablet all the functionality of a PC, with the added advantages of a touch screen and tablet portability. Though the device, with its high price point, might not tempt average consumers away from comparatively cheaper iPads and Amazon’s (NASDAQ:AMZN) Kindle line of tablets, it could attract enterprise customers with its features and with the familiarity and compatibility it would have with current hardware and software.

If Microsoft’s Surface Pro can swing the enterprise market away from Apple, it may be enough to keep Microsoft safe through declining PC sales. Also, Microsoft isn’t alone in the push for Windows tablets — Hewlett-Packard (NYSE:HPQ), Acer, and Asus are all developing their own Windows tablets, which could help Microsoft’s OS compete with the single-manufacturer iOS.

Still, a corner on the business industry won’t be enough — and too many companies have already acquired iPads for their mobile needs. Microsoft needs to hook the average consumer if it’s going to compensate for dwindling PC sales. And unfortunately, the average consumer will likely be turned off by the price of the newest Surface tablet, if they’re even aware of its existence.

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