Microsoft
For years Microsoft Corporation (NASDAQ:MSFT) tried to avoid the low margin segment of PCs; hardware. However, a changing industry landscape has caused a shift for Microsoft as discussed yesterday in Steve Ballmer’s shareholder letter.
“This is a significant shift, both in what we do and how we see ourselves — as a devices and services company.”
“Further, as we develop and update our consumer services, we’ll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily.”
This is addressing the Microsoft Corporation (NASDAQ:MSFT) Surface tablet which upset traditional PC manufacturers who now have to compete directly with Microsoft.
However, 4 years ago I remember reading a Microsoft Corporation (NASDAQ:MSFT) 2008 material risk disclosure that foreshadowed the change from just software to both hardware and software (the Apple model). This risk has been included in every annual report since then:
An important element of our business model has been to create platform-based ecosystems on which many participants can build diverse solutions. A competing vertically-integrated model, in which a single firm controls both the software and hardware elements of a product, has been successful with certain consumer products such as personal computers, mobile phones and digital music players. (Page 15 2008 10k)
Just goes to show you, read every line from the 10k, the lawyers require these disclosures for a reason.
For those who don’t have the time to read through mountains of disclosures but still understand the value of them check out the free trial at footnotedPro (no compensation is received for referrals) 
Disclosure: Long Apple

See Also:
Steve Jobs vs Steve Ballmer 
Microsoft Buys Skype: I feel poorer 
Microsoft: Playing Catch Up in a Complex Ecosystem

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