Everything old is new again in technology. Apple arguably created the PC market with easy-to-use interfaces that made Microsoft's MS-DOS operating system look unnecessarily difficult. But everybody knows that it was only a matter of time before Microsoft out-maneuvered almost everybody and became the dominant force in PCs, nearly crushing Apple in the process.

Then about a decade ago it all started to change again. Leveraging the success of the iPod, Apple ultimately introduced the iPhone and iPad and in so doing significantly shifted the market once again, and left some asking if there was any need for a PC anymore. This put Microsoft in the unfamiliar position of being not only back on its heels, but perhaps not even relevant anymore - the bully from Redmond was seeing its once captive customers migrating to platforms where Windows not only didn't dominate, but could barely compete.

With the recently announced release of the Microsoft Surface tablet, it is worth asking whether or not Microsoft is riding Apple's coattails, or whether this is a case of the empire striking back and showing that it can adapt to what the market has clearly said it wants.

SEE: A Primer On Investing In The Tech Industry

The Surface Tablet - Best of Both, or Muddled Mess in the Making?
While it was not at all uncommon in the mainframe days that proceeded the PC age, Apple established itself as the only player that wanted to control both the hardware and software in a seamless, integrated package. Microsoft would license MS-DOS (and later, Windows) to anybody who wanted it, but Apple wouldn't.

Though it often seemed stubborn and a market-limiting move, Apple always argued that keeping hardware and software together delivered the best performance to its customers, and legions of die-hard Mac loyalists would likely agree. Now Microsoft's own CEO is out saying "Things work better when hardware and software are considered together. We control it all, we design it all, and we manufacture it all ourselves."

It looks as though Microsoft is copying Apple's own playbook by launching its own tablet, the Surface. Although some may dismiss this as just a marketing move to highlight the features and capabilities of Windows 8 for mobile devices (and coax hardware companies like Samsung to use it), it may in fact turn out to be something more.

Microsoft appears to be positioning this as a hybrid of the PC and touch-based tablet. Not only does it offer a keyboard, but Microsoft boasts that it offers much more functionality when it comes to apps like spreadsheets - perhaps answering those who ask "but what can you actually DO with a tablet?" If it all works as advertised, this could be the heavy-duty tablet that makes the iPad look more like a toy; if it doesn't work, it's going to be a jumbled mess that never works right and further proof that Microsoft doesn't, and can't, "get it."

SEE: The Quick And Simple Tablet Buyer's Guide

Coattails or Rational Competition?
With Microsoft and Google now both developing and launching their own branded tablets, there are plenty of articles out there claiming that Microsoft is out of ideas and simply trying to ride Apple's coattails and avoid a downward spiral into irrelevance. Perhaps that is so, but consider the matter from a different perspective.

Microsoft is best-known for Windows - a graphical user interface that was easier to learn and much less intimidating than MS-DOS. Oh, and by the way, it just happened to largely mimic a lot of the key features of Apple's Macintosh operating system (so much so that Apple sued). Likewise, the very popular Microsoft Excel spreadsheet program was the "me too" competitor to Lotus 1-2-3 that ultimately surpassed and buried its predecessor.

In other words, two of Microsoft's greatest successes were not original, novel product introductions, but rather competitive responses to the successful products of other companies. Microsoft may not always be innovative, then, but they are not stupid or unduly stubborn - if it sees an idea working, it figures out how to do it just as well, if not better. Apple has built the market for tablets (really, only Apple and Samsung have had any success with tablets), and now Microsoft is going to try to take it from them.

SEE: Must-Have Software For The Home Office

A Disturbance in the Force
It may seem ludicrous to suggest that Apple should worry about Microsoft's entry into the tablet market and/or its partnership with Nokia in the smartphone market. After all, Apple is riding high - the company sold 67 million iPads in the first two years, whereas it took three years to sell that many iPhones, five years to sell that many iPods and 24 years to sell that many Macs. And maybe it is ludicrous - perhaps Apple has learned from its past failures and won't let Microsoft catch up and pass it the way it did in the PC market.

But while Apple may be safe, companies like Samsung, Nokia, Dell and Hewlett-Packard may have more to worry about. If Microsoft (and Google) can succeed with their own devices, do they really need partners like Samsung and Nokia? And if turns out that Microsoft's mobile OS is just as good, or better, than Apple's, are we going to see a repeat of the PC market evolution?

The Bottom Line
For better or worse, competition in a free market means either coming up with truly innovative ideas (and taking on outsized risks trying to turn them into commercial successes) or identifying what is already popular and successful and figuring out how to copy it without running afoul of patents and copyrights. It just so happens that Microsoft has been pretty good at this over the years, and now they appear ready to give it a go again in the mobile/tablet market.

Certainly there are no guarantees of success and maybe this really is just a "me too" last gasp from a company that is out of ideas and no longer innovate enough to compete. But companies that underestimate Microsoft have done so at their peril in the past, and all of the hyperbole about whether Microsoft is riding Apple's coattails really won't matter a bit, if the market share needle starts moving back in Microsoft's direction.

Related Articles
  1. Entrepreneurship

    How an Internet Sales Tax Will Affect Your Small Business

    Learn about how the Marketplace Fairness Act may impact small business owners should it pass in the House and what the act requires from business owners.
  2. Savings

    Craft Beer Clubs – Bargain or Not?

    If you're an aficionado of artisanal brews (or would like to be), a beer club can be a palate-pleasing, albeit pricey, way to expand your hops horizon.
  3. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  4. Stock Analysis

    Has Urban Outfitters Lost its Way? (URBN)

    Urban Outfitters just made a bold move. Will it pay off?
  5. Stock Analysis

    Is Walmart's Rally Sustainable? (WMT)

    Walmart is enjoying a short-term rally. Is it sustainable? Is Amazon still a better bet?
  6. Savings

    Are Wine Clubs Worth It?

    Some points to consider, before committing to a membership for yourself – or as a gift. The right club can also help you save money over the holidays.
  7. Stock Analysis

    Kohl's: Should You Stock Up or Sell? (KSS)

    Many traders are bearish on Kohl's, but long-term investors might want to take a closer look for this simple reason.
  8. Stock Analysis

    GoPro's Stock: Can it Fall Much Further? (GPRO)

    As a company that primarily sells discretionary products, GoPro and its potential falls right in line with consumer trends. Is that good or bad?
  9. Stock Analysis

    How Macy's Will Refresh its Brand

    Macy's is heading in the wrong direction, but what's the potential for a turnaround?
  10. Stock Analysis

    Nordstrom: Is it a Buy or Should You Avoid Now?

    Consumer trends are going to change over the next year or so. How will this impact Nordstrom? Will it adjust in time?
  1. Where can you buy NetSpend reload packs?

    You can only purchase NetSpend reload packs at Giant Eagle, Albertsons, Roundy's and Pathmark supermarkets. NetSpend cards ... Read Full Answer >>
  2. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  3. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  4. What role does the OEM (original equipment manufacturer) play in the finished product?

    Original equipment manufacturers (OEMs) do not typically play much of direct role in determining the finished product. However, ... Read Full Answer >>
  5. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
  6. Is the retail sector also affected by seasonal factors?

    Generally speaking, the retail sector is highly seasonal. Almost invariably, sales in the retail sector are highest in the ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  3. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  4. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  5. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  6. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
Trading Center