By the way the market has reacted after the Windows 8 launch, you may think Microsoft is dying. The company's shares have vastly underperformed the S&P 500 since the launch and early sales numbers haven't helped the cause.

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But the loss of confidence in Windows -- and by extension, Microsoft -- is a quick reaction to a long play from Microsoft. I think it's far too early to count Microsoft out.

Windows 8 adoption will take time
When you change your operating system the way Microsoft did with Windows 8, it will take time for customers to get accustomed to it. As popular as it was, even Apple's iPhone took years to become a ubiquitous consumer product. Now, iOS is a known commodity for most smartphone users so there's little hesitation about buying an iPhone or iPad.

Let's at least give Microsoft enough time to get people comfortable with Windows 8 before writing it off altogether. Investors were freaking out over an NDP report that PC sales were down 21% in a four-week period ending Nov. 17, but for five of those days, Windows 8 wasn't out. Adoption may also be slower because of the transformation of the operating system.

The point is, we won't know if Windows 8 is a success for months. We can't judge the first three weeks of sales and call it a flop, especially when we haven't begun to see the OS in the mobile arena yet.

Smartphones and tablets are in their infancy
The initial lack of success for the Microsoft Surface also has many analysts and investors writing off Microsoft's tablet business far too quickly. Yes, Microsoft priced the device too high if it really wants to take a bite out of Apple's dominance in the business, but this is the company's first solid stab at a tablet.

Most reviews of the Surface are generally positive (including my own) and although I won't be trading in my iPad for a Surface any time soon, I can see a time when I might. For Microsoft, that's progress.

The big driver of sales in the future will be the familiarity millions of Windows 8 users gain from using a similar interface on desktops. As users grow accustomed to the colorful squares, I think Microsoft's mobile offerings will become more compelling. Microsoft also needs to build a critical mass in the app store, which is a chicken-and-egg situation until smartphone and tablet volumes pick up. But Apple and Google have shown that apps will be added at light speed once developers decide there's enough devices to make it worthwhile. 

Some have noted the absence of big-name apps like Facebook , Pandora , Yelp , and Amazon is a red flag for Microsoft. Before we freak out about the absence of these apps, we need to remember that the developers' kit only went out in September, and it takes some time to write apps. In the case of Facebook, let's not forget that it took Facebook nearly two years to launch a native iPad app.

In some ways, Microsoft can thank Apple for an opening in mobile devices. Apple has made the iCloud and iTunes incredibly easy if you own all Apple devices, but it's still a somewhat walled off system to PC users. Most of the world still uses PCs so, just as the iCloud and other services from Apple keeps users in its sphere of influence, so will features like the SkyDrive and Microsoft app store.

The slow launch of the Surface and Windows 8 smartphones is disappointing, but let's also remember that this is pure upside for Microsoft. Its share in both markets is almost non-existent.

The value is far too compelling
If the PC isn't dead and the tablet and smartphone businesses are pure upside, the stock is a bargain at 8.3 times forward earnings and a 3.5% dividend yield. The same can be said about Wintel's other half, Intel , which trades with a 10.4 forward P/E and a 4.5% dividend yield.

For an even more in-depth look, read our brand-new premium report on Microsoft,  in which our analyst explains the huge opportunity for the company and covers the challenges that lie ahead. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

The article Don't Count Microsoft Out Yet originally appeared on Fool.com.

Fool contributor Travis Hoium is short Amazon.com and manages an account that owns shares of Intel and Microsoft. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw The Motley Fool owns shares of Apple, Amazon.com, Facebook, Google, Intel, and Microsoft and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Apple, Amazon.com, Facebook, Google, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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