Microsoft launches new Windows 10 operating system

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Windows 10, Microsoft’s newest operating system

In the first week of October 2014, Microsoft (MSFT) launched Windows 10. It is the newest version of Microsoft’s desktop operating system (or OS) that will work across desktops, tablets, and phones. Through Windows 10, Microsoft aims to blur the lines between mobile and desktop operating systems. The company shared its Windows 10 plans with customers in September.

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According to Microsoft (MSFT), Windows 10 is designed to “deliver a single unified application development platform” and is “the most collaborative version of Windows” ever made. Windows 10 is described by the company as a “tailored experience,” implying that it is designed to provide support to varied devices ranging from the “Internet of things” to enterprise servers. The pricing details as well as sales details are yet to be disclosed.

If Microsoft continues to post positive results, it will benefit exchange-traded funds (or ETFs) such as RAFI Fundamental Pure Large Growth Portfolio (or PXLG) and MSCI Information Technology Index (or FTEC), which have significant exposure to the company.

microsoft qualcomm
Windows is trying hard to capture the low end of the mobile market

In early 2014, Microsoft (MSFT) announced that devices with screens smaller than nine inches would not have to pay the licensing fee. Instead, they could run either Windows 8.1 or Windows Phone for free. The company stated that 50 new original equipment manufacturers (or OEMs) have started to develop Windows phones and tablets since the announcement.

Windows Phone devices use relatively expensive chips compared to its peers

The low-end mobile market offers very thin margins. To capture this market, Microsoft requires partners who are ready to take a blow on their margins and profits. Moreover, as the above chart shows, Windows Phone and its devices have only used Qualcomm (QCOM) chips. This chip is usually more expensive than MediaTek processors, which are comparatively low-cost chips used in many Google (GOOGL) Android phones and tablets. It is to be seen how Microsoft intends to capture a larger share of market in this space.

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