Microsoft Lacks Apple's Polish

With the upcoming release of the Vista operating system, Wall Street is intensely focused on the possibility of Microsoft (MSFT - commentary - Cramer's Take) returning to meaningful growth and the concomitant end to its weak stock market performance. That makes this a compelling time to compare the software colossus with Apple (AAPL - commentary - Cramer's Take), a company whose stock has ridden the iPod into the stratosphere.

Apple's focus on delivering highly distinctive and desirable products positions it to take market share in PCs, which should allow the company to continue driving blistering earnings growth. Microsoft, on the other hand, continues to bungle new-product introductions, and is facing tough, nimble competitors in several of its newer markets.

Given the myriad of challenges facing Microsoft and Apple's ability to capitalize quickly on and even create new trends, it makes sense to continue betting on Apple.

One of the biggest ingredients in Apple's success is its concentration on user-friendliness and security, which has won it countless fans who are singularly devoted to its products. Additional Apple stores and continued consumer penetration of the iPod are only expanding that population.

Like its product designs and stores, Apple's marketing message is simple and streamlined, pointing out that a Mac works right out of the box and can do anything Windows does without the security problems. This all helps Apple make it very easy for people to like their computers, even as they pay higher prices.

Despite its best efforts, including untold billions spent on marketing, Microsoft has never been able to create passion for its products. Windows is a passive choice, meaning very few if any people actively seek out the software. The closest that Microsoft gets to this type of dynamic is consumers postponing a PC purchase to wait for its new operating system. But that isn't loyalty, and it certainly isn't passion.

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In keeping with TSC's editorial policy, Michael Comeau doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Comeau is a research analyst at TheStreet.com. In this role he performs stock analysis for TheStreet.com Breakout Stocks, and is also a regular contributor to RealMoney.com. Prior to his arrival at TSC in June 2004, Comeau worked as a Consultant to Toyota Motor North America, performing in-depth research on automotive industry issues, primarily in the areas of alternative engine technologies, competitive analysis and macroeconomics. His primary market interests include consumer technology, specialty retail, and small-caps. Comeau received a bachelor's degree in Finance from Brooklyn College, and has completed Level 1 of the CFA program.. He appreciates your feedback; click here to send him an email.