Will Apple Eat Into Microsoft's Profits? (NYSE: MSFT)

Shares of Microsoft (MSFT) tumbled 2% this morning as Goldman Sachs provided us with details that “Microsoft was being threatened by the rise of tablet computers such as Apple's iPad, which do not run Windows software.” Although it is true that that current tablets to not run Windows software, the new tablet trend should not eat into Microsoft’s profits. Apple’s iPad competes in its own market, as a tablet and a notebook/netbook computer serve different purposes to customers who may require both devices. Microsoft is simply missing out on the tablet frenzy until it is able to launch its own tablet running windows.

Microsoft shares are down 21% so far this year, even as its Windows 7 operating system impresses customers and has been selling at record levels for the tech giant. Microsoft has been lagging in the phone and tablet industry, but the company is best known for coming out with “improved” versions of the competitions’ product. Goldman Sachs’ downgrade comes at a time when the shares have already been beaten to a pulp.