Microsoft's struggles do not stop with its problems in the software industry because it also faces a tough rival in the hardware sector. According to the latest earnings report, Qualcomm, a chip manufacturer, owns the inside track of phones such as Samsung Galaxy S4 and iPhone 5S. Its chips could be found in more than 800 smartphone devices along with 500 more on the way.

Since Qualcomm is the only LTE chip producer in the industry, it is considered as a good buy by the analysts. Qualcomm's growth was strengthened by more than US$1.8 billion investment on research and development. It gained an annual 21% rise. Its profits also boosted from US$4.20-US$4.45 per share to US$4.40-US$4.55 per share. The figure went accordingly with the anticipated increase in its chip shipments for the entire year.

Analysts further stated that Qualcomm is currently the best stock to own in the industry because it deals with making chips. Its advantage is the ability to sell in a diverse range of customers and tablet manufacturers. 12.5 was said to be Qualcomm's forward price-to-earnings and a US$60 per share price tag. Finally, Microsoft would grow like Qualcomm if it would be able to get its act together on the industry of smartphone and tablets.