The Late Microsoft Windows 8

by John Kirk   |   March 7th, 2013

10x091098b5efaIn 2008, Microsoft’s Windows OS ran on 95% of all computing devices. By the end of 2012, Forrester estimated that Microsoft’s market share had declined to 30%.

In 2012 there were more Android devices sold than Windows devices. By the end of 2013, it is probable that there will be more iOS devices sold than Windows devices too. If so, by the end of this year, Windows will be only third in terms of OS sales.

Microsoft’s Profits

By the fiscal year ending June 2009, Microsoft had made $14.5 billion in profit. By 2012, that number had grown to $21.76 billion.

That sounds pretty good until it’s compared to Apple. Apple’s net income for the fiscal year ending September 2009 was 8.2 billion. By the end of fiscal 2012, its income had risen to $41 billion. Not only had Apple made up the difference between the two companies, in 2012 it lapped Microsoft, making almost exactly twice as much in profits as Microsoft had. The iPhone, alone, makes more profit than all of Microsoft and by the end of 2013 it is expected that the iPad, alone, will make more revenue than all of Microsoft too.

Microsoft’s PC-centric Problem

chart-of-the-day-microsoft-income-by-segment-oct-2012

The purple portion of the graphic, above, represents income from Microsoft Office. The green portion represents income from Microsoft Windows. Microsoft’s problem is that both of those cash cows are located, almost exclusively, on desktop and notebook PCs and PCs are in decline both in actual and in relative terms.

In 2012, PC shipments fell 3.7%. And IDC just slashed its 2013 PC shipment forecast from growth of 2.8% to a decline of 1.3%.

Windows 8 was supposed to reverse the downward trend in PC sales but, if anything, it has made things worse.

The new operating system launched on Oct. 26, along with heavy advertising by Microsoft and its PC hardware partners, including Hewlett-Packard (HPQ) and Lenovo. But the response to Windows 8 has been “underwhelming” and worldwide PC shipments tumbled 8.3% in Q4, the most substantial decline recorded for a holiday quarter, IDC said.

The Plan

The plan was to create a single user interface for all Windows phones, tablets and PCs. By migrating Windows’ substantial user base in desktops and notebooks to Windows 8, it was hoped that users would become familiar with the unified user interface and then naturally migrate down from Windows desktops and notebooks to Windows tablets and phones.

The Reality

The reality has been quite different.

First, Windows phone sales have been a disaster. Despite the introduction of Windows 8 phone and the Nokia Lumia, Windows phones actually LOST market share in the recent holiday quarter.

Second, support for Windows RT is rapidly drying up. Acer delayed their RT offering, HP an Toshiba opted out altogether, Samsung refused to produce an RT product for the U.S. and now Samsung is withdrawing its RT product from the European markets.

Third, despite a massive advertising campaign, there is absolutely no indication that Windows 8 tablets are capturing the imagination of consumers. In fact, all of the evidence points to the exact opposite conclusion.

charty-chart-ipad-130304

Source: The Yankee Group

The Yankee Group recently surveyed consumers, asking them which brand of tablet they intended to buy. The iPad dominated the discussion but if you examine the chart carefully, you’ll see that Microsoft and its hardware partners barely registered at all.

Chitika-Tablet-Usage-US-and-Canada-January-2013

Source: Chitika

Further, in terms of Tablet Usage Share, Microsoft tablets are barely a blip on the radar. The Microsoft Surface, for example, shows up at Zero Point Four percent, behind even the discredited Blackberry Playbook.

Fourth, it appears that the growth in Windows 8 apps is rapidly declining.

When windows 8 was first released, there were 500 apps being added to the Windows 8 market each and every day. By December 27, that number had dropped to 415. By January 28, the number had dropped much further to 156.

Fifth, in a sign of how poor sales have been, Microsoft has started to discount Windows 8 licenses in order to spur the growth in Windows 8 touchscreen notebooks and tablets.

Conclusion

Microsoft is not in any danger. But their personal computing empire is.

Microsoft is making more and more of their money from their server and tools division, which is a good thing. But their income from Windows and Office is still huge and it seems that both are tied to the declining PC sector. And as Microsoft loses its monopoly position, its dominance over even the declining PC sector is waning too.

Microsoft will continue to make money on the sales of Windows 8 licenses but the goal of Windows 8 was to transfer Microsoft’s user base from desktops and notebooks to tablets and phones. That bid has, so far, failed.

Is it too early to say that Windows 8 has failed? Or is it already too late for the late Microsoft Windows 8?

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?
  • Rich

    With their consumer products, Microsoft tried to graft the past onto the present and it didn’t work. And they’re repeating the same error by allowing Steve Ballmer to keep his job.

    If the enterprise was all they cared about, no problem. But it obviously isn’t.

    • JohnDoey

      Something like 80% of enterprise client hardware purchases today are Apple-branded. So only caring about enterprise also did not work.

      Apple sells a full PC with a billion C/C++ apps and the best Web and media platform for $329, and it has a 10 hour battery, no viruses, weighs 300 grams, fits in a jacket pocket or small purse, and requires almost no training, almost no setup, and almost no administration. It’s like an enterprise dream PC. And it has a matching phone and matching workstation.

      • steve_wildstrom

        Do you have a source for the claim that 80% of enterprise client purchases are Apple branded? Sounds highly unlikely.

      • acturbo

        i think you mean 80% Microsoft. Apple essentially doesn’t exist in the enterprise beyond a client device.

  • Terry

    It is amazing that when you are criticising Android, you say market share is not important. But I see you criticise Windows 8 in this section by reflecting on its market share, at least twice. Not to say that I disagree with your hypothesis and conclusion though, I have recently bought a macbook pro retina to change my 4 years old windows 7 laptop. The reason: windows 8 did not appear appealing to me as how was windows 7 years ago. If microsoft sticks with how default windows look like, I would have definitely buy Windows.

    • steve_wildstrom

      Reasonable market share is a necessary, but not sufficient, condition for any sort of dominance. Having the largest share doesn’t guarantee true dominance, but having only 2 or 3% makes sure that you aren’t very important.

    • FalKirk

      Two things. First, Microsoft is fighting for third or fourth place in tablets and phones. Without market share, developers will not develop for their products.

      Second, Microsoft licenses their products and licensors need market share to make profits. Apple’s business model is fundamentally different because it makes its profits from both the sale of its hardware and its software (although, primarily its hardware). Since Microsoft only takes a portion of the total profits, it needs market share in phones and tablets if it hopes to make profits.

    • JohnDoey

      Android has a critical mass of market share, while Windows 8 does not. Market share is not Android’s challenge right now — its challenge is profitability, keeping its hardware and software makers in business. Microsoft’s challenge is not profitability, it is market share on modern systems — gaining touch users, touch apps, etc.

  • Kyrke

    Pretty bleak. An equally insightful action plan to resolve this situation would be worth millions. Could the Tech.pinions brain trust come up with a practicable solution?

    • Vandergrift01

      One solution would be for folks to actually try Win8…. I’m a Linux guy but Windows 8 is pretty slick. The start screen sucks junk, but the rest of the OS seems to be a winner to me… Definitely not anywhere near as bad as Vista was…. (rinses with mouthwash!)

      • JohnDoey

        How much money have you spent on Windows 8 systems, apps, content, and associated services? $0, right?

        Enough said.

      • capnbob67

        Everything you said could and may well be true but it does not refute the hole facing MS. Linux tinkerers who fundamentally like Win8 as a strong optimization of Win7 is exactly what MS does not need. There is no growth and little margin in that segment. It is the embodiment of the declining market that will condemn MS to a slow death.

    • JohnDoey

      How to save 2013 Microsoft:

      1. invent a time machine
      2. go back to 1996
      3. buy NeXT before Apple does
      4. hire Steve Jobs as CEO of Microsoft
      5. invest in hardware
      6. create a 21st century workstation
      7. create a 21st century music player
      8. create a 21st century phone
      9. create a 21st century PC
      10. Profit!

    • Noah Berlove

      The easy answer: fire Steve Ballmer.

      The slightly more complicated answer: give up on the idea that you can continue to grow the Office franchise. It is mature and works so well on ever 10 year old desktops that there really is no significant growth opportunity left. Microsoft’s 12+ years of failure in mobile and tablets is strongly routed in trying to extend Office into other form factors. Microsoft really needs to envision more uses of computing devices beyond typical office applications. Apple (and others) have succeeded because they realized portability and mobility were the killer apps, not word processing and spreadsheets.

  • stevesup

    The Late Late Windows 8…

    • drollwit

      Too little, too eight

  • TimT2011

    Apple has always focused on the smart who desire simplification. Microsoft focused on the smart who needed complexity.

    With Windows 8, that changed. They are now focusing on the lowest-hanging fruit, the stupid. Unfortunately those people tend to not buy computers/tablets because they can’t afford them, nor would have any desire to use one.

    You’ve got to show respect for your customer from your very first idea all the way to delivery, with Win 8 Microsoft completely lost that. Microsoft should stop running after what they THINK Apple is and instead focus on quality products like Windows 7.

    • http://twitter.com/greengart Avi Greengart

      Huh? Whatever Windows 8′s faults (supposed and real), being designed for “the stupid” is not one of them. The UI formerly known as Metro has garnered much deserved praise. It is modern, clean, and focused on efficiently presenting information in a touch environment. Combining two different UI metaphors into a single product has been challenging for users, but, if anything, it shows that Microsoft respects the intelligence and ability of its customers to manage the transition on their own.

      • TimT2011

        It really has nothing to do with combining two UI metaphors. The most popular apps and hacks for Windows 8 are bypassing Metro completely at startup and bringing back a start button.

        There is also no need for transition for transition’s sake. People did not adopt the Zune, they did not adopt Windows Phone 7 and they are not adopting Windows 8 or RT. Windows 8 may garner praise from some, but it’s not a success like Windows 7 was and that speaks volumes. Metro needs to go.

      • JohnDoey

        Metro has not been praised. That is just not correct. Jakob Neilson ran usability tests and panned it, Microsoft’s hardware partners panned it, most tech columnists panned it (and the few who didn’t mostly said wait and see if it catches on,) and PC buyers chose Windows 7 over Windows 8 during the launch quarter.

        Metro goes back to Zune HD, an iPod touch clone. Nobody has ever been enthusiastic about it. When Metro was added to Zune, sales dropped. When Metro was added to Microsoft’s ancient mobile phone/PDA system, sales dropped. When Metro was added to Windows PC, sales dropped. There is not even a Metro version of Microsoft Office — even Microsoft is not 100% behind Metro.

        Every once in a while somebody writes that Metro is somehow an impressive technical feat, but the Mac features “LaunchPad” and “Mission Control” are more impressive technically, visually, and in terms of usability, and they were integrated with OS X in such a way that they were immediately useful. Mission Control used to be called Exposé and goes back to 2003.

        There is a long tradition of excusifying for Microsoft because confused CIO’s bought their systems in lots of 10,000 and everybody had to make do. That time has passed. People who feel abused by their Windows PC at work have iPads and Macs at home. Many big companies have standardized on iPhone. The secret is out that Microsoft’s work is years behind and has very poor quality. The excusifying sounds ridiculous to most people these days. Like saying that a bridge that collapsed had garnered praise at some point from some guy. It collapsed — end of story.

        • Andy Davis

          I have the opposite issue. I work all day on the Mac and can’t wait to get home to play on my Windows 8 box.

          Launchpad on Mac OSX is an OK first draft of an application access menu, but it is not remotely in the same league as the Windows 8 start screen.

    • Mhe She

      TimT2011, calling customers Stupid! They are smart, they have rejected the over-priced machines that don’t really do much more than Android or Apple!

      These are the same customers can than afford and do pay for a $1000 laptop because that laptop can do so much more than a $ 800 tablet!

      • TimT2011

        Mhe She, I very clearly said first thing that Microsoft’s customers were smart people who desired complexity. However, those customers are not who Windows 8 was designed for, thus my point.

  • Carlos Revelez

    As always, an excellent job. I’d like to say a couple of things about Terri’s comment. First, Windows wasn’t a free product, so when Microsoft became the empire it was, its market share was critical because such dominance was translated in money, huge amounts of money, and there was nobody that could change it, not even the US government; in Android’s case, it is totally different because Android is free, its dominance as OS hasn’t translated in money, not even close at all, because Android users looking for free apps, free games, free utilities, etc. They don’t spend money, don’t buy apps, don’t buy games and, worst of all, Android users don’t browse in their Android devices. iOS users do. Android OS is not a business zone, it’s a disaster zone plagued by malware and second-hand apps. Tech Opinion has a lot of information about it, and the web is also plenty of reports that show this.

    Second, in its glory days, Microsoft was dependent on nobody, it ruled all related with computing according only with its desires, nobody else’s. Google, in the other hand, has control of nothing related with Android, and I meant NOTHING. Amazon has its tailored version of Android, and nothing pass. Android’s market share is so high because China is its biggest market, a market that offers NO MONEY. Worst of all, Samsung, one single OEM, gets all the benefits from the Android market, and maybe already represents a serious threat to Google. So, what we have here is a very bad business model, a subsidized business model payed off for Google, and that is not good for anybody. Think about it.

    • http://www.newportessentials.com/ paco cornholio

      Have to disagree here.

      Android users don’t get phones for free. They pay for the hardware/software package, in some combination of cash and contractual commitment, just like anyone who buys a Windows system. Android users may spend a lot less on software than iOS users do, but to imply that they spend nothing is just wrong.

      Second, Amazon, Samsung and others aren’t sitting quite as pretty as they think with their abilities to fork Android. With services are becoming much more important relative to operating systems, and Google hobbling their services to Amazon by keeping key apps (Drive, Maps, Voice) out of Amazon’s app store (and denying most Fire users access to Play), it won’t be easy to squeeze Google out of Android.

      • JohnDoey

        The only services that are important to the vast majority of Android users are voice calls and SMS texts. One could make the argument that a user who buys a $0 Android phone and commits to 2 years at $50 per month is paying only for voice calls and SMS texts, not for the phone or Android, which were chosen by the carrier and paid for by the carrier, same way the carrier chose and paid for network antennas and stores and billing systems — all so they could sell users their one product: voice calls and SMS texts.

        If you read this before your comment: “IF Android is like an iPhone THEN …” then your comment makes sense. But Android is not like iPhone. Saying it was is the big lie of Android. It comes from users expecting a Silicon Valley phone that shipped in 2008/2009 to be like an iPhone. But Android was biught by Google in 2005 — it is a standard carrier phone, with phone heritage, not iPod/PC heritage like iPhone. People who care to get Google services are 90% iPhone, 8% Samsung, and 2% Google Nexus. You are pretending that a small number of low-end iPhone clones represents “Android” when the vast majority of Android is just feature phones.

        In short, almost all of the people who buy phones have iPhones, and almost all of the people who buy voice calls and SMS texts have Android. Another way to say that is if the consumer chose the phone, it is likely an iPhone, and if the carrier chose the phone, it is likely an Android. Microsoft phones have almost no desirability because they are not as carrier-friendly as Android, and not as consumer-friendly as iPhone. Microsoft essentially went with “Windows PC -friendly” but that didn’t work.

        • http://www.newportessentials.com/ paco cornholio

          I put it to you, John: isn’t this an indictment of our entire American society? Well, you can do what you you want to us, but we’re not going to sit here and listen to you badmouth the United States of America! Gentlemen!

    • JohnDoey

      Android is not really relevant — it’s a feature phone replacement that does not run C/C++ apps (90% of client app code) and does not even run HTML5 apps well. Android is like a greatest hits of 2006 phones — a cell phone with bolted on Java apps and Web browser. It is free because nobody will pay for that. Microsoft did not have anything better, though. Their dream of selling their antique PDA system to phone vendors was done the moment iPhone raised the bar with a PC-class system in a phone. That is all people will pay for now. So even if Android did not exist, Microsoft was not going to make money selling a PDA system after iPhone shipped. The proof is that Android also did not make money selling a PDA system after iPhone shipped. Android grew from 2010–2012 as manufacturers used it to replace other commodity software systems, but Android lost 3% phone market share in the final quarter of 2012.

      Windows PC’s are Microsoft’s money maker and they are being replaced by Macs and iPads and iPhones that run the same C/C++ apps as Windows, only with touch and great design and modern technology and much better quality.

      The Intel Mac took almost the whole high-end PC market ($1000 and up) between 2006–2010, pushing almost all Windows systems down to the low-end PC market (around $500.) Since 2010, iPad is now eating the low-end PC market alive, with Windows PC sales shrinking each year and iPad growing almost 100% per year. Android barely registers because it can’t run PC apps. Android tablets compete with iPods in the media player (including book reader) market. All the Android tablets combined are just a blip compared to iPad by itself.

      Also, notice that consumer software development is centered on Apple. Today, software developers run Macs. Google, Facebook, Twitter are more than 75% Mac users. Objective-C is the #1 most-learned language — that is C with Apple’s object-oriented extensions, used to make Mac, iPad, and iPhone apps. Web developers have been on Macs for years because of the combination of Photoshop and Unix. Content producers have also been on Macs since the 80′s. So iPad has all the books, magazines, music, movies, C apps, and Web apps because the people who make those things are all on Macs and the stuff they make is essentially native to Mac/iPad. So Microsoft has to convince us to buy Windows PC’s and some future iPad-class device, buy their developer tools, learn their new API, and struggle to get even basic quality out of our content as we move it onto their platform. It’s even harder for them to do than HD-DVD (failed Microsoft/Toshiba clone of Blu-Ray) or Zune (failed Microsoft clone of iPod) because music and movies are ISO standardized and could essentially just be copied over. All the people who would need to be involved in a Microsoft consumer-based ecosystem are already deeply invested for many years in the Apple consumer-based ecosystem. There is already a shortage of Xcode programmers — why would you switch to Microsoft and make less money and have almost no audience?

      Also, a key thing is the switch from CD/DVD to iTunes-class content delivery, where the consumer’s SSD storage is essentially a CD/DVD that updates itself SECURELY over the Internet. In this new modality, Apple is a giant with 10 years experience and Microsoft barely exists. The vast majority of content for a Microsoft system still ships on CD/DVD or insecure Web download. (Think 8-track cassettes.) After all these years, Microsoft has the chicken/egg problem because they did not keep up with the technology and consumer demands.

      • steve_wildstrom

        The top Android phones–Samsung Galaxy III, Nexus 4, etc.–are fully competitive with anything out there, including the iPhone 5. but there is a huge spectrum of Androids that at the bottom are feature phone replacements. It’s hard, and fairly pointless, to talk about “Android” as though it were a single thing.

      • acturbo

        Android is not really relevant? please stop posting stupidity.

    • Mhe She

      Carlos, excellent analysis about Android. Unfortunately, Android is the best alternative to Apple. Apple has a closed system with the following cons:

      1. You cannot directly transfer files to Apple without using itunes.
      2. You cannot play any media file. Need to convert some popular media files to Apple formats.

      Androids pretty much allows anything. Also not all Android customers are freeloaders! There are several who buy high-end devices and “do pay” for the applications. Developers are making money off Android too!

      Finally, Microsoft is very very very late to the tablet game and is still expecting the previous business model to work where, Microsoft made all the profits on the OS. It is not working!

      Microsoft has to sacrifice the profits to stay in the consumer market. Otherwise, they are dead in the consumer market! In the enterprise market, they will be fine for some time to come!

      • http://profile.yahoo.com/VHQMA5ZNKNRBNLRU6AW26P47PM Carlos

        Hi Mhe She, thanks a lot for your words. Please, let me say something about your comment: I agree with you, Android is the best alternative to Apple’s iOS, but transfering files and play different media files are, in my opinion, two very risky tasks to perform with all the rampant malware that infects the web, and Android in a particular way. The Apple formats maybe are not the betters, but at least they are safe.

        It is true that not all Android customers are free downloaders, but compared to iOS users the difference is huge, and it gets worst with the terrible habit of Google to hide all the information related to Android. That does not help at all, the only thing that causes is that the developers think twice to whom make apps. Finally, Microsoft is late to all movements that are changing the world, I think it’s just a matter of time before Microsoft give up, they have nothing to fight in this mobil world… and they know it.

        Best regards.

  • ChKen

    Great commentary, John. It’s not too late for Microsoft, they could spend $14B on marketing of Win8, and they should make all their phones and tablets bigger and bigger. I KNOW that’ll work, cause it has worked for Samsung.

    • JohnDoey

      Samsung ate Microsoft’s lunch. That is what Microsoft usually does. The only way it works long-term for Samsung is if the wheels come off at Apple like in the late 80′s and early 90′s. That is why Samsung marketing promotes the idea that the wheels are coming off at Apple. Not actually happening. Today’s Apple is iPod-Apple, not Mac-Apple. The iPad mini is just the latest proof of that. The 90′s version of iPad mini would have been a great Mac that sold for the same price as the cheapest, crappiest Windows PC and would have killed the demand for Windows systems before it got started.

      • tailhook

        Why would you say Samsung ate Microsoft’s lunch? Lol.

        A) Microsoft makes software, Samsung is a device maker. They don’t really compete on much and usually work in tandem. If anything, Samsung is eating Apple’s lunch.

        B) Every sale of an Android cellphone means a lot of royalties to Microsoft. They aren’t exactly going hungry.

        C) You’re going to find the Samsung Tablet PC aren’t selling well, and the Surface Pro will eat THEIR lunch. What you see with Samsung’s Tablet PCs is what happens when Samsung tries to make their own designs lol. Its like looking at a little kids first idea of how to make something work. They didn’t have the Surface Pro to copy like they did the iPhone until it was too late.

        Oh.. and the 90′s version of an iPad mini wouldn’t exist. The various technology that make up a tablet had to mature to the point that the iPad was even possible. You going to miracle up modern touchscreens? Touchscreens were around, they were simply nowhere near current tech.

        And trust me, the wheels ARE coming off Apple. It isn’t a mistake that they made an iPad Mini, if anything they probably saved their rear end by getting out of the way of the Surface Pro and Convertibles truck and can probably sell more minis overall while having a stockpile of cash to stay in the game. But it also means they just got bounced out of an emerging device market(laptop/tablet hybrid) and have nothing that can compete with it for a good long while. I have a feeling the OEM’s are going to get bounced out of that market too as people simply go with the Surface Pro. Surface Pro first and foremost is the laptop part of the equation in being able to run any Windows program, with the ability to go tablet. Not the other way around.

        Its not going to be an easy feat trying to retrofit both OS and Macbook Air for touch, especially when they’re focused on trying to get out magic TV’s and watches and especially when they’ll have to swallow their ego and admit they made a mistake in not updating OS for touch and that maybe, just maybe Microsoft is on to something :P.

        • capnbob67

          The anecdotal evidence I have from a couple of IT departments at major enterprises is that Surface pro won’t eat anyone’s lunch. It may be used to carry lunch but even as a tray, it’s too small. Win Desktop apps are painful on a small hi-res screen, most tablet users are managers and above who can’t deal with such a small screen. They also do not have major Office requirements. Another class of tablet users are the real mobility warriors but who typically rely on email or web apps to access CRM, OM, ERP, KM systems, etc. which are getting much better on the lighter, cooler running, cheaper, longer-lived iPad. As many have said, Surface Pro is a weak tablet and a flawed laptop replacement.
          Surface Pro is toast as a mass market device. That probably makes it breakfast :-)

        • jfutral

          “And trust me, the wheels ARE coming off Apple. It isn’t a mistake that they made an iPad Mini, if anything they probably saved their rear end by getting out of the way of the Surface Pro and Convertibles truck and can probably sell more minis overall while having a stockpile of cash to stay in the game.”

          Look, I can be as guilty as the next guy of using hyperbole, but there is nothing in any kind go data or trends that can illustrate this position. Maybe if you read of opinion article by John Dvorak, Joe Wilcox, or that former hedge fund guy who seems to revel in being anti-Apple-anything. You know, all those guys who said Apple had no business being in the smartphone market or that the iPad would flop.

          This doesn’t even overstate the current conditions, it is wishful thinking at this point. Not as impossible as pigs flying, although at least we have commercial with that. Apple’s “wheels are coming off” all the way to the bank. MS should have Apple’s “problem” whatever that is.

          Joe

  • Alfiejr

    yup.

    Windows 8: a bigger flop than Vista.
    Windows Phone 8: battling Blackberry for last torch on Survivor Island.
    Windows Surface Pro: Gates’ last gasp (fourth?) attempt to jam Windows into a tablet.
    Windows Surface RT: stick a fork in it, it’s done.

    i like their strategy, i like it a lot.

    • JohnDoey

      Surface is almost painful to look at, because the Surface table was such a joke versus iPhone in 2007, and many people were left wondering why the Surface table was not a finger-driven tablet PC when Apple just introduced a finger-driven tablet iPod. So to relaunch Surface in 2012 — 5 years after iPhone, 2 years after iPad — and it turns out not to be an iPad-class tablet but rather a miniature desktop PC — wow! The Surface/Office 2012 workflow is the exact same as the Mac/Office 1985 workflow. The touchscreen and Metro are totally wasted.

    • http://twitter.com/mbox J. D. Farmakidis

      Nothing is as big a flop as Vista, except arguably Windows ME – which I had the pleasure of demonstrating for Microsoft as it crashed in front of an audience who laughed their heads off.

  • Anders Weckel

    @Alfiejr:disqus I dont thin Windows 8 is a total flop. I like the way microsoft were thinking. The userbility is alot more awesome in this kind of windows in any others. Yeah i know apple is the pioneer when it comes to userbility, but i really enjoy
    windows 8

    • FalKirk

      The goal of Windows 8 was to create one user interface that ran across phones, tablets, notebooks and desktops in order to encourage the use of Windows 8 on tablets and phones, in particular. Windows 8 may work well and it may make Microsoft a lot of money, but if it doesn’t kick start their tablet and their phone product lines, then it is a strategic failure.

      • tailhook

        Pretty much everything rides on the numbers for convertibles and Surface Pro. If they truly have made The Next Great Device line of a combination laptop and tablet in the 10″ form factor that can sell, it’ll break the back of the original iPad(mini is allready starting to cannibalize it). The key words being ‘that can sell’.

        The iPad Mini will then take over as the de facto pure tablet, there is honestly no reason to have two different sizes of the same thing, people always will want the smaller one. And if you are looking for a 10″ device, why would you go for a pure tablet, when you can get all the functionality of a laptop?

        Its the same reason why RT bombed. The key problem with RT is they tried making it the same form factor as the convertible(while being thinner). They should have made it a stripped down 7″ tablet that ran the apps, and they’d have been on much firmer ground.

        Right now i have a feeling that Apple is in dire need of finding a way to make a Macbook Air a convertible(no easy task given the absolute dark ages their desktop op sys is in concerning touch), and Microsoft is in dire need of finding a way to shrink the RT to a 7 inch form factor. Time will tell.

        • steve_wildstrom

          Microsoft is a victim of its legacies. I think it doomed the 7″ Windows tablet when it decided to retain support, however limited, for Desktop in Windows RT. The desktop UI barely works at 10″ and is hopeless at 7 or 8. Microsoft thought Office would be a big differentiator for its tablets, but it needed a form factor in which Office would at least sort of work.

          • tailhook

            I agree that Office would and should go, But pure tablets simply won’t sell at 10″ anymore, and not just because of the Pro.. but because of Apple’s own iPad Mini.. so they don’t have much of a choice.

            Microsoft missed that boat and are allready positioning to take over the 10″ form factor with the Convertibles. The only way they compete on pure tablets is with an entry at 7″, as thats the only form factor pure tablets that will likely to be sold in within a year or two.

            Even disregarding Microsoft, my point stands that nobody needs the same device at two form factors, and when you’re talking mobile, the smaller and lighter always wins. Jobs was right about one of the two lines not selling if they released the Mini, he was just wrong about which one.

            Apple should be very concerned that they may in fact be losing a device-line(partly of their own making) at the 10″ form factor and are nowhere close to having a device to replace the traditional iPad(some sort of Macbook Air/iPad merge) that can compete with the convertibles.

            Over time, if Microsoft gets a cheap Surface Mini together at 7″ designed as a pure tablet just to run apps, even if its not gangbusters out of the gate it’ll steadily eat away at the mini with those who want to want a uniform interface to their convertible and/or PC.

            BTW, Apple should also be concerned that they’re abandoning the PC device line by leaving the Mac out to rot. I guarantee you there is going to be a form factor that they find for the PC that works well with touch.

            PC’s aren’t going away.

          • Paul

            I bought a surface pro a few weeks ago. So far it’s the best tablet I have owned, my iPad is a joke compared to what I can do on my surface. I am able to load ANY software on it and get real work done. I also love how it starts instantly, no waiting. Nice job Microsoft, at least on this one!

          • jfutral

            “But pure tablets simply won’t sell at 10″ anymore,”

            I know you are spit ballin’ like the rest of us, but I really think this is a huge stretch of an interpretation of current conditions or trends. The 10″ iPad still sells extremely well. You might well be correct eventually, but there is nothing happening that would indicate this to be possible, much less what “is”.

            Joe

          • tailhook

            http://news.yahoo.com/apple-reportedly-slashes-9-7-inch-ipad-orders-143016327.html

            They were expecting sales of 60 million, they’re now expecting sales of 33 million. Half the demand for the tablet just vaporized, and that only takes in to account January numbers. It in no way factors in the introduction of the Surface Pro in February.

            Will they sell more of the original? Yes… but the numbers are collapsing on them and will continue to do so as the Surface Pro starts to gain traction. But if you have the same pure tablet(iPad) at 7″ that you do at 10″, who in their right mind buys a 10″, other than a sucker? This is actually a Good Thing in that it gets out of the way of the Surface Pro at 10″, while at the same time, the demand for 7″ cheap pure tablets will probably be more than that for 10″, with closer margins.

            They simply need a product that can compete with the Surface Pro at 10″ and are a LONG way away from that due to neglect of the macbook and mac lines(you can’t fix one without fixing the other).

          • jfutral

            Well, this isn’t actually an Apple statement. It is a comment from an unknown industry “source”, seemingly someone possibly involved in the supply chain somewhere with no direct way to find out who actually said this and how much they actually know. At the last conference call, Tim Cook already addressed how much weight we should weight give to such supply rumours. Which is none, by the way.

            Analysts have cut their expectations, but we’ve seen how often analysts get any of this right, which is almost none.

            But Apple has their next earnings announcements coming up soon enough. We’ll see then.

            Maybe the 10″ iPad is dead in the water, but somehow I doubt it.

            Joe

          • JohnDoey

            Or a Metro version of Office.

        • JohnDoey

          There is definitely a reason to have an iPad instead of iPad mini, and the mini has grown the market more than cannibalize it. The full-size iPad does not just have 2 inches more display, it has about 10 times more pixels and is about 10 times faster in CPU/GPU. A user with a pro SLR camera buys an iPad with Retina to get the extra pixels, and so do doctors who are looking at high-res X-rays and pilots reading giant flight manuals. Users who are running GarageBand or Cubasis or iMovie or Avid buy iPad to get the speed. There are many other apps and users that benefit greatly from 10x pixels and 10x speed.

          The current iPad and iPad mini lineup is selling roughly 50:50 — same as MacBook Air and MacBook Pro split up the MacBooks roughly 50:50. Not by chance but because Apple designed them that way. The smaller ones prioritize mobility and compromise performance, the bigger ones do the opposite. Both approaches satisfy 100% of users.

          Another way to look at it is that iPad mini replaces a $300–$400 netbook, while iPad with Retina replaces a $600 notebook PC.

          And keep in mind, some people have both sizes of iPad and use them both all day. An iPad mini is an awesome iPad accessory.

          • tailhook

            @John Doey: Not according to Apple.

            http://news.yahoo.com/apple-reportedly-slashes-9-7-inch-ipad-orders-143016327.html

            And thats just what the iPad Mini did to it in Q4. No telling the hit they took from the Q1 Surface Pros.

            Trust me… a year or two from now you won’t be able to buy any pure tablet at anything other than a 7″ form factor. Original iPads are going to be phased out.

          • steve_wildstrom

            According to Apple? The article you link to is a BGR post based on a Digitimes story based on unnamed sources based on someone’s belief of what Apple’s production plans were. Fourth-hand speculation is not fact.

          • tailhook

            Since when has fourth-hand speculation stopped any journalist, Steve? :P Just because it doesn’t happen to line up with your view doesn’t make it invalid. And if it wasn’t true, you could bet your bottom dollar Apple would have been all over the story with a prompt response. No company wants people to think that they’ve cut expeted demand for one of their products(especially a core one like the original iPad) by half when they haven’t.

          • steve_wildstrom

            Apple never, ever, responds to anything of this sort, positive or negative. And yes, it could be true, but the quality of the sourcing lends the report very little credence.

        • jfutral

          I personally think the Surface Pro will sell well enough. I know people that this is exactly what they think they are looking for as they use their iPads. But what they aren’t willing to admit is that what they really want is a laptop. They will not be satisfied with the Surface as a laptop replacement (having tested one out briefly on my own) and while it can run Windows software, almost none of that has been redesigned yet to work on a touch interface, so Surface will disappoint as a tablet.

          I haven’t actually heard from any of my friends if they have purchased one yet or not. I hope they do. I would love to hear their feedback.

          But I don’t see this as a game changing product.

          Joe

  • synfluent

    Once upon a time, General Motors ruled the world of automobiles.

    And, when the world of automobile buyers demanded a small, economical car, General Motors gave us their version of that car in the Chevrolet Vega.

    That pretty much says it all.

  • EnticingHavoc

    Over the long term I’d rather put my money on Microsoft instead on Apple. Apple actually has only 2 (!) products which are the main cash cows. These 2 products are quite easily to supplant when buyers preferences shift. Ask Nokia.
    Microsoft though has a wide range of products which are almost impossible to supplant. Even the much laughed at and scorned Win8 is an unavoidable product. If you skip Win8, Win9 is a necessity, unless you are willing to give up all your SW infrastructure. Good luck with that approach.
    Bottom line : MS will loose some market share and probably fail in the smartphone business. So what. But contrary to Apple, Microsoft stands on many legs, loosing one is therefore not a big deal.

    • Ralph Jones

      “Apple actually has only 2 (!) products”

      Er no:

      MAC PRODUCTS: 11
      iPAD PRODUCTS: 4
      iPOD PRODUCTS: 5
      iPHONE PRODUCTS: 3
      APPLE TV: 1
      SOFTWARE PRODUCTS: 17
      ACCESSORIES: 16
      TOTAL Products: 57

      Just their iPhone line is worth more than ALL of Microsoft. (In 2013, their iPad line will be too.)

      • EnticingHavoc

        No matter how many flavors of a product a company sells, finally it is only 1 (!) product.

        What I do see is : iPhone and iPad are responsible for the big part of Apples income. Contrary to Apples believe almost nobody steps up from an iPad to a Mac PC/laptop.

        My uneducated prediction is : 3 years without a super-uber product and Apple stocks will see $200 again.

        Apple was (!) living on the unsurpassed ingenuity of its founder. And whenever Jobs was not part of Apple the company suffered severe pain. Unfortunately this time Jobs will not resurrect.

        • leonremi

          not upgrading from Ipad to Mac…but from Windows to Mac…..just bought myself an Imac after years of crappy Dell/Windows abominations……..why ? because XP was ok, Win 7 could be made to llok like XP, and well…. Win8 ? it has Modern UI, so thank you but no thank you

        • Space Gorilla

          You’re right about one thing, your prediction is indeed “uneducated”. This might help you: http://www.asymco.com/2013/02/11/counting-stool-legs/

        • JohnDoey

          By your logic of product flavors, Microsoft has only 1 product: Windows. And it is shrinking year over year for a few years now.

          If iTunes is not an individual product, neither is MS Office. If Mac mini is not an individual product, then neither is Windows Server. If iPad is not an individual product, then neither is Xbox.

    • JohnDoey

      No, that is not true.

      You cannot replace a Mac. It is the only workstation left. The vast majority of content producers and software developers work on Macs and utilize unique features of the Mac. Mac users are not PC users. Mac users are running Macs specifically to get a unique feature that a Windows PC lacks. For example, digital audio and video production originated on the Mac, has always been 90% or more on the Mac, and is centered around the QuickTime media production platform. ISO MPEG-4 is a QuickTime container because that is what video editing tools create. The idea that the Mac could go away is ridiculous. Hollywood and Silicon Valley and their extended families worldwide are 75% or more Macs. Those users have skills in apps like Final Cut or BBEdit that only run on Macs, they use OS X subsystems like CoreAudio or CoreVideo to save time and make money. They cannot wait to get their next Mac and save even more time and make even more money.

      An iPad easily replaces a Windows PC for most users most of the time. We can see this happening since iPad shipped — Windows PC shrinks every year while iPad grows almost 100%.

      Most of Microsoft’s stuff is just a clone of an existing name brand product. That is why they have a monopoly strategy of killing all competitors with dirty tricks. That is the only way to create demand for a me-too low-quality product. Apple has always had to earn every user one-by-one. Apple users passed on the Microsoft products for a specific reason and can’t swap out the Apple product for something else because everything else is always 5–10 years behind Apple.

      The most popular Windows app for almost 10 years is Apple iTunes, which is on the vast majority of Windows PC’s. There is no opposite equivalent for Microsoft, not even MS Office for Mac.

      What task is there for which I absolutely MUST get a Windows system? Maybe high-end accounting. Maybe. Windows software development? Best to do that in a virtualizer on Linux or Mac because you need to run XP and Vista and 7 and 8 to address the whole market.

      As for the number of Apple products, you missed a lot of them:

      - over 75% of pro video editing is done with Apple Final Cut
      - over 90% of consumer video editing is done with Apple iMovie
      - over 75% of pro audio editing is done with Apple Logic
      - over 75% of consumer audio editing is done with Apple GarageBand
      - over 75% of consumer online media purchases are made with Apple iTunes
      - over 75% of music players are Apple iPods
      - over 90% of mobile Web browsing is done with a browser that incorporates Apple WebKit, the HTML5 reference standard
      - over 50% of printers incorporate Apple Bonjour, and so do many non-printer devices

      … so you simply are not familiar with what is going on with Apple.

    • Noah Berlove

      But MS does not really have that wide a range of products. Windows and Office account for about 60% of MS’s revenues and 80% of net income. The server software business makes money, but that is about it. Online services is a perpetual money loser and entertainment (XBox) has been break-even at best for years. Right now, neither Windows nor Office are growth stories, with the most recent numbers suggesting decline. I don’t think anyone really believes they are going away, but their importance is certainly diminishing.

      Yes, the iPhone and iPad dominate Apples revenues and earnings, but Apple’s four other product categories (Mac, iPod, iTunes & Software and Accessories) are all profitable and at least two of those have growth potential.

  • Bobby

    Again, John Kirk is so right on this issue and consistently states the obvious. It’s articles like these that make me read Tech.Pinions.

    • benbajarin

      Thanks Bobby. We do what we can to stand out from the pack :) Our smart commenters are a big part of our sites success as well. So thanks to you all.

      • http://twitter.com/mbox J. D. Farmakidis

        Perhaps the smartest comment of all..

  • capnbob67

    I’m pretty sure there are not more Android users than Windows users in the world. There are about 2x as many Windows licenses in use as there are Android. This year should be the year that Android sells more licenses in a year than MS sells Windows. Is that what you meant? Not that this invalidates the failure of MS’ Win8 strategy.

    I would also suggest that MS is in trouble on more fronts. I know several corporations fresh off their “ditch BES and the BB” campaigns who are looking at their several hundred dollar per year per user contracts for Exchange, Outlook and Office and thinking… Really?
    I was in a meeting with a F1000 deputy CIO today where it was posited that a cheap, “fit for purpose” email/calendar client plus their new cloud based collaboration/KM solution (Jive) would obviate their very expensive enterprise licenses for Outlook/Sharepoint. Nobody shot it down and many of the EVPs nodded enthusiastically.

    I hear about IT depts doing analyses of how many users really need a full MS desktop and Office apps. One industrial company with 12000 staff estimated it at <500. Everyone else was fine with free or web-based apps. Just saying. MS is no longer unassailable in many of its previous monopoly positions.

    • benbajarin

      Yes, this year (2013) will be the year the Android install base is greater than the Windows install base.

      Current active users, not yearly license sales, is the more important number. Right now my estimates for active Windows PCs is around 1.2 billion. Android doesn’t have a billion user install base but probably will by the end of this year.

      I don’t believe quantifiable data around this exists so I am approximating of course, but I think its a reasonable approximation.

      • JohnDoey

        Last year’s sales are more important than installed base. Most of the software and accessories for a system is bought in the first year, and last year indicates current trends better than previous years.

        I think this is especially true now because in March of 2010, only 3 years ago, Microsoft had 99% of the low-end (centered around $500) computer market, but in 2012 they had only 60% or so.

        Further, half of the Windows installed base is XP zombies that buy no software or services or accessories at all. Those users have passed on 3 versions of Windows and are moving to iPads faster than to Windows 8. Take out the XP users and the Windows and iOS and Android installed base is almost exactly the same size right now, but the iOS installed base spends 10 times their weight. That is why software development, hardware accessories, and content sales are centered on iOS. iOS users also put in 10 times the usage, which is why Google makes way more money from iOS eyeballs than Android eyeballs.

        There are a lot of ways to massage the numbers and make it seem that things are not as dire for Microsoft as they are. The problem is that Ballmer spends half his time doing that. There is competition now. Pretending that sales from last decade count for anything is a sham. Microsoft needs to earn this decade’s user’s business. For many $500 PC buyers, they are right now for the first time choosing between 2 PC options instead of just Windows. The fact that they bought Windows in 2009 is irrelevant. It doesn’t predict a 2013 Windows sale. That user may buy an iPad.

        • capnbob67

          Great insights. Recent sales are most important in consumer markets though less so in Corporates where the 3 year amortization schedule rules. I would also note that the vast majority of Android licenses are smartphones and not so smart in many cases so not strong substitutes for Windows PCs. Still, XP zombies are strong reason to resize the relevant market. These low requirement, value conscious users (as you said) are a prime target audience for tablet replacements.

    • FalKirk

      “I’m pretty sure there are not more Android users than Windows users in the world.” – capnbob67

      Ben brought your comment to my attention. I re-looked at my source and it was referring to sales in 2012, not total numbers. I’ve re-edited my original statement to make it more accurate and included a link to the original source.

      I appreciate your catching this and bring it to my attention. I’ll try to do better next time. :)

    • JohnDoey

      The last time I consulted at an office that had their own I-T, the 2 biggest I-T issues were:

      1. too many users refused the Windows 7 upgrade and associated 1 week training course and too many managers refused the associated 1–3 month productivity hit

      2. too many users were buying and expensing iPads and using them on the corporate Wi-Fi all day long, overtaxing the Wi-Fi and also defying the iPads-are-not-yet-approved-on-our-network policy, which changed overnight when the CEO bought and expensed his own iPad and threatened to outsource I-T if they can’t keep up with business needs

      … I think those 2 were really part of the same problem.

      The users were all on XP systems with fuzzy analog-connected displays, 2 hour battery life, and funky features like touch buttons that disable the Wi-Fi and were too easy to accidentally brush your hand over and then no network. iPad was a giant upgrade. They were 80% of computing time on iPad right away, and by now many of those users are 100% iPad, given the breadth and quality of today’s iPad app catalog.

      In an I-T guy’s head, he comes up with a small number of reasons why the user can’t use an iPad all day, but the reality is the user has the iPad all by itself at meetings, at lunch, when they travel, at home when some emergency comes up, and during those times, they easily adapt to iPad and it becomes their main PC, not secondary PC. It becomes a chore to use the Windows system after a short while. You want your documents on iPad, you want everything on iPad, so that everything is in your purse or briefcase or jacket pocket at all times, whatever comes up.

      • capnbob67

        Great points. A couple of years ago, those were great examples of IT guy issues but because the offending users were very often the VP/SVP/EVP/C-level guys it quickly moved from “we can’t” to “here you go”. These devices have rapidly percolated down to directors and managers in many of my clients and are showing up at all kinds of meetings. My last senior exec meeting at one G1000 industrial company had reps from legal, HR, manufacturing, engineering, safety and marketing. Every one had an iPhone (not corporately supplied) and half had iPads on the table. Apple owns the C-suite.
        A senior IT guy i met with recently was trialling a Surface Pro and it was not going well. 10.6″ or so was just too small for anything but RT-style touch apps none of which they used (or would ever use).

  • Noah Berlove

    John,

    This piece is good, but incomplete. Yes, MS is missing the tablet and smartphone boats, but that is not the whole story of their problems and why traditional PC sales are declining.

    What you are missing is the lengthening of the desktop/laptop replacement cycle. During it’s heyday, MS could bank on users replacing their computers every 2-3 years. That is not the case anymore. Millions of people are still running XP and Office 2003 on machines bought 6-7 years ago. MS can no longer has the luxury of short replacement cycles. Yes, part of this is because of new devices, but most of it is because of the maturity of the market and technology. Outside of hard core gamer and extreme power user, who upgrades their computer these days because it’s not powerful enough?

    This is why MS is trying to move Office (and probably eventually Windows) to a subscription pricing model. Ignoring the fact they can not deliver a new Office suite and Windows version every 3 years, they know user are not going to buy a new license every 3 years.

    This does come back to the tablet and smartphone markets as these are now the high turn-over devices. Missing that market is limiting MS growth, but that should not cover up the fact that the Windows and Office franchises were already heading for trouble.

    • FalKirk

      “What you are missing is the lengthening of the desktop/laptop replacement cycle.” – Noah Berlove

      I totally agree that desktops and notebooks are being replaced at a much, much slower rate.

      • tailhook

        So true. Its almost like ipads are a disposable device. Get a the new fashion each year.

        • JohnDoey

          iPads have 2–3 year working lives. You get a 1 year warranty, you can extend it to 2 years at purchase time, and you get 3 years of free system updates and the app catalog wil run on your device for 3 years. After 3 years, your iPad has cost you 3 cents per hour of use and a new one will be significantly better in every possible way. iPad gives you 10 hours per day on batteries and can travel everywhere with you and the apps cost 1–10% of the cost of Windows apps and there are no viruses — getting value out of it is easy.

          I have an original iPad here that is almost exactly 3 years old now and still going strong. I don’t regret the purchase for a moment. It easily paid for itself multiple times over. How many netbook buyers from March 2010 can say the same?

      • capnbob67

        In all seriousness, what hard evidence do we have for this lengthening replacement cycle? While it is a comfortable and intuitive statement, it is not obvious except for a priori statements from pundits who have no particular analytical insight into reality e.g. http://allthingsd.com/20121113/as-ipad-grows-pc-replacement-cycle-slows/ – a hack referencing a bank analyst. Really?

        I am not refuting the substitution of tablets for PCs, just the reality (or not) of the replacement cycle impact on PC sales. The concept is rolled out at every event in the PC market. The pundits and hacks have talked about it happening before the release of Vista and Win7 as well as Win8 e.g. 2009 – http://www.zdnet.com/blog/btl/the-pc-replacement-cycle-will-windows-7-light-the-fuse/19074

        Is it getting longer each time? Every 3 years people talk about enterprises moving from the 3 yr depreciation/support contract-driven cycle to a 4 or 4.5 year cycle. For enterprises, my experience is that a variable replacement cycle has always happened. Front-line staff got new PCs on 3-yr cycles and then those still serviceable machines were handed down to admin and other back-office roles. I still see P4 desktops littering corporate offices running XP and Citrix but it has nothing to do with iPads or substitute products. They are still fit for purpose because the purpose has not changed in 10 years for most of these corporate machines. If anything, they’ve become simpler as clients get thinner/web-based and Office 2003 still does all the basic productivity jobs. iPads are coming in but largely in addition to PCs, new and old. For the enterprise jobs an iPad is good at, you wouldn’t need a new PC anyway – the PC decisioning seems to be separate from tablet choices.

        My generally worthless anecdotal evidence would suggest there is not a mobile device-driven discontinuity in either consumer or enterprise markets. For consumers, to me (who plays advisor & tech support for 30+ family/friends), their upgrade cycle is and has always been driven by key demographic factors, not by availability of nerd-bait gadgets. Age, use-cases and wealth drive the consumer PC market more than the release of a new model, technology or device. Older relatives and friends have always kept their hardware until it broke or failed to deliver on their use cases (which evolve pretty slowly). Younger ones have recycled faster with usually because their use cases are evolving to more complex things. Wealth (or lack thereof) limits or enables all segments.

        If we do find actual evidence, we should be careful in according causality. I would posit that (as with most real-world experiences), it will be a combination of several things already mentioned:

        1. Use cases evolving more slowly than hardware (Core Duo is good enough for most users’ needs)

        2. Use cases getting simpler/lighter (e.g. web-based)

        3. OS optimization revitalizing older hardware e.g. OSX.6 vs X.5, Win7 vs. Vista

        4. Financial constraints (general economic hardship)

        5. Greater reliability of hardware

        6. Substitute products for some use cases

    • JohnDoey

      But the reason people are running XP is that newer versions of Windows did not deliver a substantially better experience that drive the user to upgrade.

      Macs still get replaced every 3 years or so as usual because the user wants a Retina Display or Thunderbolt or to move from a MacBook Pro to Air to get half the weight. Then they often sell the 3 year old Mac for 1/3rd to 1/2 what they paid for it, subsidizing the new purchase.

      One problem is people excusify for Microsoft by saying that is a problem with computing, not Microsoft. For example, people think all computers get viruses, when that was almost exclusively a Microsoft problem before Android. And Apple systems have zero viruses. There is real competition now, so Microsoft’s incompetence is very clear. Windows PC’s could easily be getting replaced at the same rate as Macs if Windows PC’s didn’t suck so bad. It is entirely Microsoft’s fault. Macs actually get replaced faster now than 10 years ago because the new ones are that much better than the ones from 3 years ago.

      My Mac is 2.5 years old and I have one app that wants more CPU/ GPU than I have and 10 apps that want Retina, and zero apps that require the heavy optical drive. So when my 3 year warranty is up, I will replace this Mac immediately because the upgrade will pay for itself immediately. If Windows users can’t say the same, that is Microsoft’s fault.

  • Walt French

    With Win8 (especially, /RT), Microsoft now has OS support on phones, tablets, laptops and desktops.

    That’d put them in GREAT shape if there was a great family structure, so that apps, data and usage patterns could easily slide from one device to another. Alas, all the legacy Win stuff locked is away from the lightweight and battery-friendly tablets; the new touch-centric apps are likewise totally out of place on a desktop such as my four-screened HP. The apparent promise of the snazzy new UI notwithstanding, the tablet apps don’t have fraternal twins on the phones; your phone app won’t automatically scale up and run on your Surface—RT or Pro.

    Even Microsoft Office shows this mishmash of not knowing how to target basic needs that arise on different devices. I won’t claim it’s easy — @JLG has fussed over real iWork being iMpossible under the iPad’s strictured UI — but this is Microsoft’s crown jewel in terms of competitiveness in User Land; if they can’t figure it out, neither will other developers — or customers.

    Microsoft apparently knows a thing or two about data sharing, but it’s Apple that advertises shooting photos at the kids’ soccer game and seeing the results on your home desktop when you walk in the door.

    So this apparent coverage of users’ apps and data needs on multiple platforms may as well be offered by different companies. Little or no synergy.

    • JohnDoey

      And it is a stretch to call Windows RT systems “tablets.”

  • http://www.facebook.com/Mista2Wellington John Howell

    A couple of problems with this, is that just because you are an Android user, doesn’t mean you don’t use Windows, or a desktop, or laptop computer too. As for sales, I wonder if that is because phones are individual, but families might share a computer.
    At our house, we have a Mac and a windows 8 PC, an iPad, but we all have our own phones. BTW, we also have 2 original xboxes, and an xbox360. All get used quite regularly. It just depends on what you want to do. I’m using my iPad right now because my daughter is on my Mac playing moshimonsters which won’t wok on any tablet or phone. My wife is using the pc to edit some documents for a magazine, while my son has some friends over and are using one of the old xboxes to play a game because it lets all 4 of them play at once on the console for the game they are playing, and Xbox controllers are cheap second hand 8)
    Just because I bout an iPhone doesn’t mean we stopped using the other stuff.

    • JohnDoey

      Yeah, but when nobody but you is home, which device do you use? Do you bypass the iPad and Mac for the Windows PC? Most people would not. Which device do you buy more apps for? Which device do you travel with? Again, probably not the Windows PC.

      On the other hand, which device has viruses? Only the Windows PC. Which device requires the most training? The Windows PC. Which device is the most likely to break down? The Windows PC or maybe Xbox. Which device will be the hardest to service? The Windows PC. Which device crashes the most? Windows PC or Xbox. Which device has the worst security? Windows PC. Which has the most antique technology? The Windows PC’s firmware by a long shot — it is from 1982 and predates the entire Mac platform.

      So out in the market today, more people are choosing the Apple devices than ever before, and fewer choosing the Windows devices, regardless of what they did a few years ago.

      And your Windows PC and Xbox both use 35 times the AC power of an iPad, and 2 times the power of the Mac. Plus associated impact on air conditioning if that is required where you live.

      The Windows system is not competitive. Now that there is competition, it was driven out if the high-end by Intel Mac, and is getting murdered now in the low-end by iPad and iPhone.

    • Noah Berlove

      You perfectly illustrate MS problem. Why buy more computers when other devices are helping fill the void. Absent smartphones and tablet, you might have bought another PC.

  • Defendor

    That earnings graph is interesting. Especially the entertainment portion. That would be Xbox and associated businesses.

    The case people often make for the eventual Microsoft success in Smartphones is the Xbox model where they pumped money in until they “won”.

    “Winning” in Xbox doesn’t really look all that great. And that was pumping loads of money into the business while Sony shot itself in the foot out of the gate, and it looks like that business may be heading into another cash drain cycle.

    Then there is the online services business that they continue plow money into supporting.

    With any sustained decline in PC based revenues, adding long term cash support for Windows Phones, to the cash propping up entertainment and the cash propping up online services, looks like a recipe for a shareholder revolt.

    • JohnDoey

      iPad by itself outsells all game consoles combined.

      The Microsoft copycat model only works if the original product manufacturer falters, like Apple in the early 90′s, or Sony in the late 2000′s. Apple is a very different company today than in the early 1990′s. Apple has consumer PC’s and phones locked up, and Google has carrier phones locked up, and both companies are very financially healthy.

    • FalKirk

      “”Winning” in Xbox doesn’t really look all that great.” – Defendor

      Your analysis is spot on. The X-Box cost Microsoft some 10 billion dollars in buy in and now they rule a market that is tiny compared to phones and tablets and they rule a market that is going to go away because it is being disrupted by phones and tablets. Not much of a victory, all told.

      • steve_wildstrom

        I wouldn’t write the Xbox off quite so quickly. True, game consoles are past their peak. But the xbox gives Microsoft an important entrée to the living room. Im many ways, Xbox is a more advanced media box than Apple TV. The question is whither Micrsooft can or will capitalize on it. I asked Yusuf Mehdi at the D; Dive Into Media conference whether Microsoft would ever consider an Xbox that was a pure media play–no game console–but did not really get an answer.

        • FalKirk

          “the xbox gives Microsoft an important entrée to the living room.” – Steve Wildstom

          Agreed.

  • blakjedi

    Meanwhile in the real world as opposed to the Technorati blogosphere:

    http://www.cio.com/article/729350/Are_Windows_8_Tablets_Racing_to_Enterprise_Success_

    http://www.neowin.net/news/lenovo-records-record-profits-thinks-windows-8-will-drive-pc-demand

    http://readwrite.com/2013/02/04/200-million-workers-want-windows-8-tablets-not-ipads

    IPads didn’t take over in their first six months or even year of existence. This is the brand new dual paradigm of windows. It will re-orient both Google and Apple in time.

    pc notebook sales expected to rebound in 2013 – http://www.digitimes.com/news/a20130304PD206.html

    http://www.windowsitpro.com/article/paul-thurrotts-wininfo/idc-slow-start-pc-industry-rebound-late-2013-145343
    I’m no professional blogger or journalist and all of these articles can be found in a 30 second Bing search.. lol

    • JohnDoey

      Those articles are all from paid Windows PC industry shills. You have your biased reporting hat on exactly backwards. CIO? Dan Lyons? Why not include the official Microsoft blog?

      Windows PC sales have been expected to rebound since 2010 and never did. Not even with a new version of Windows.

      What you are missing is that mobile and ARM are both much bigger than PC and Intel. So the Windows installed base is about 1 billion and shrinking after 27 years, while the iOS installed base is about half a billion and growing after only 5.5 years. iOS apps are made by the same C language developers as Windows apps. Microsoft is competing for programmer hours and consumer hours with iOS and Microsoft is very definitely losing. If current trends hold, sometime in 2016 or so iOS installed base will pass Windows installed base.

      iOS devices outsold Windows 8 licenses last quarter.

      No matter how well Microsoft does on Intel PC’s, it will continue to lose to Apple who is taking advantage of mobility and ARM, 2 of the most significant trends in the last 10 years of computing. A Surface RT for twice the price of a typical Windows notebook is very different than Apple’s iPad mini for 1/3rd of the price of a Mac notebook.

      • jfutral

        What was kind of funny is that CIO link included a link to another article on the same site that articulated the opposite position.

        And MS’s own, actual numbers also articulate a problem.

        Tell me whose “real world” I should believe, again?

        Joe

      • steve_wildstrom

        Putting my moderator hat on: If you have some evidence that any of those authors are “paid Windows PC industry shills,” I would love to see it. If you don’t, I would prefer not to see serious charges thrown around recklessly.

  • andrew taylor

    There are a few other pieces missing to completely explain why Win 8 and its associated devices are not seeing the demand that MS was hoping for. First and foremost is their App Store, and how they treat with third party developers with regards to it. MS basically ported over the developer model that they used for XBox Live. This might have seemed a great idea for the corporate drones. But for the developers, it was a hellish nightmare. The developers, especially the independent developers tolerated the MS Bullshit on XBL simply because MS and XBL were the big game in town for video game console software. It was pay to play and you had to be there. But with the surface and Windows 8 devices. MS ramped up the pain and costs to the developers, for a miniscule fraction of the market. I know developers that were told to shell out $40,000 for validation testing for MS, when the maximum installed base of Surface Tablets was under 80,000. Every one of them said Apple is a dream to work with in their APP store. Only surpased by SONY ands their PSN. So in less than a month MS had managed to insure that they, the worlds largest software company, had the least amount of apps and software on their app store. The developers abandoned them in droves. And currently see no reason to come back. And that kills the Win 8 tablet products. An iPad might be expensive, but it has a vast multi million entry app store. Android much the same (if a bit weirder). Surface? A couple of hundred obvious ones and a port of Angry Birds.

    Stick a fork in it, its done.

    • JohnDoey

      Another big thing with developers is we all bought Intel Macs during the late 2000′s, if we weren’t already on Macs before. If you don’t actually use Windows, it is really hard to consider developing for it. Not just because you have to buy everything from scratch, but because you simply don’t know the computing landscape — what apps are needed, what apps will users pay for, what apps is it possible to build?

      And going from Java phone development or Windows PC development to iOS is a step up in quality and capabilities. You do less work, yet your app is better. Going from iOS to Windows 8 is a step down, you have to remove features of your app, compromise it, yet you do MORE work. Hard to get me excited about that.

  • Martin

    So Win8 was available for the last 4 months vs. Android devices that were sold for years and you feel that this provides sufficient data to see the long-term trends. What a genius move. Why don’t you compare Microsoft to Samsung, HP or GE – it would not be any more appropriate, but at least a tiny bit more original. And don’t get me started on comparing Apple to Microsoft. Apple sells overpriced hardware and leeches profit from content created by others. That’s not comparing even apples and oranges, that’s slugs and oranges. So far both Apple and Google have failed to provide a seamless, uniform experience across all platforms. Granted so far neither has Win8, but at least it’s a step in the right direction. May be some of us should stop pretending to know it all and just wait and see what happens from here.

    • benbajarin

      No he is comparing total 2012 Android devices sold vs total Windows devices sold in the same time frame. Our numbers anticipate that within the next 12-18 months there will be more Android devices as a total global install base than Windows (all flavors of Windows). Every bit of data we have has MSFT market share going the wrong direction.

      Apple, Google, and Microsoft are all taking different directions, ones that they believe are right for the current and to a degree future state of the market. As you say we will see what happens buy my firms analysis continues to anticipate a bleaker outlook for MSFT than Google and Apple in the key growth areas.

      MSFT must do something to try to change this but from my discussions with the OEMs and ODMs there is little optimism.

      • JohnDoey

        2012 final calendar quarter sales, per day average:

        - 800,000 Windows 8 licenses (about $40 each)
        - 833,000 iOS devices (about $500 each)

        Also, in that same quarter, Android lost 3% phone market share while iPhone gained 6%.

        The current time is important because that is where most of the money is spent. A Windows user with a 1 year old system spends very little money on it. Also the current time identifies future trends.

        Windows 8 was very heavily marketed for a year before release. Then it was released and PC sales fell.

    • JohnDoey

      Windows 8. 1-2-3-4-5-6-7-8. Not a new product.

      Windows has been available for 27 years; Android for 4 years.

      Windows Phone 7 was also not a new product. Windows Phone goes back to 1996 — it is 17 years old right now. Google itself is younger (15.) iPhone is 5 and a half. Apple killed their PDA in 1998, and made their first phone in 2007. Microsoft made PDA’s/phones continuously since 1996. It is Apple and Google that we should be making excuses for, not Microsoft. Microsoft is an elder statesman, not a newcomer.

      Metro is about the same age as Android.

      Surface is 18 months older than Android.

      No excuses.

      • steve_wildstrom

        If you are going to cite history, do a little research. You are confusing names with products. Today’s Windows Phone 8 has little but the name Windows in common with the Windows CE-based PocketPC and Windows Mobile of 1998-2010. The Windows phone had an uncommonly difficult gestation and the first version did not ship until 2002. The Surface tablet only shares a name with the Surface Table. Metro, at its oldest, goes back to the Windows Phone 7 of 2009, long after Android shipped.

  • Jim

    I hope MS has to apologize to their customers for this Metro BS.

  • Calahas

    “Microsoft will continue to make money on the sales of Windows 8 licenses but the goal of Windows 8 was to transfer Microsoft’s user base from desktops and notebooks to tablets and phones. That bid has, so far, failed.”

    Correction probably needed on this statement. It appears that Microsoft has a strategy here too (like Google does with Android). Microsoft’s goal is to move its enterprise/consumer productivity professionals (or professional users) from Desktop OS version of Windows to Mobile OS version of Windows. And it has about 5 years from 2013 till 2018 or 2019 to implement this strategy. 90% of Microsoft’s revenue and profits and come from enterprise users and consumer business software buyers. The revenue contribution from consumer PC licenses to Microsoft’s bottomline on the balance sheet is minimal (like < 10% or around it). Of course, Microsoft does not reveal attach rates in its different OS licenses but the above fact is almost a fact supported by yearly statistics since 2004 or 2005.

    In my estimation, Microsoft is prepared to be mortally wounded in the consumer OS license market and consumer Office software market but they will not let Google enter the enterprise at any price. That is the thin red line.

    What is to be seen is if the SA revenue from enterprises (from balancesheet filings and statements of CEO/CFO) to Microsoft will ever see a decline in Q3 2013, Q4 2013, Q1 2014 etc.

    Microsoft's real nemesis is the entry of Google into enterprise/SMB/public government
    markets (and is Oracle's real nemesis along with Amazon's). And I dont think we are there to start to debate that point yet. Until we see Google breaking down the revenue from Enterprise on their balancesheet too. Or Microsoft reporting loss of SA revenue at its different top divisions – server, business, windows. Xbox/Bing can survive on their own or they will remain second priority since they can produce some income on their PL statements.

    I think Windows 8 only serves as a red herring. While Microsoft studies the market evolution on the consumer side and Google in particular (actually Android). That they failed in getting Apple like success with Windows 8 shows the changing nature of the consumer PC or consumer device market (but not enterprise). They need to adapt and adapt soon.

    • FalKirk

      “…(Microsoft) has about 5 years from 2013 till 2018 or 2019 to implement this strategy. – Calahas

      Wow. Respectfully disagree. The market is moving much, much faster than that. Microsoft is in serious danger of being frozen out of the future of personal computing. And they have little time, if any, to rectify the situation.

      • Calahas

        @ Falkirk,
        Let us take US pc market as a baseline since high tech gets introduced here before being spread to rest of the world (ROW). Now consumer pc market sure is being impacted by the rise of the smartphone and then the tablet device markets. One cannot produce a direct correlation between the loss of consumer pc device sales from retailers/OEMs themselves with increase in smartphone/tablet device sales from carriers but one can see this is sort of happening.
        But one deeper look at the stats and there is data to pronounce that the smartphone/tablet device market itself is in flux – that is – the 4″ smartphone is beating down the feature phone while the 5″/6″ smartphones/hybrid phablets will kill the 4″ smartphone. Isnt this one of the reasons that Apple has a problem? It does not have a larger sized smartphone or phablet device. Ultimately, I would venture to state that only 3 sizes will remain in the under-11″ device formfactor – 4″, 7″, 10″ formfactors – of which only the 7″ will sell the most.
        I am sure a statistician can do a linear regression to pronounce the death of the iPad device from Apple and the rise of the iPad-Mini. This is what Apple sell in the 100s of millions in the near future next to the 4″ iPhone. The 10″ iPad device is dying and will be dead in another year.
        What does the above stat mean for the 11″ and above notebook market? Other than the convertible/detachable tablet market pioneered by Microsoft and its OEMs, there is no threat to the notebook market. So the notebook PC market will still rise in the near future as it gets cannibalized by the detachable PC market. That is where Dell, Lenovo, Asus, Acer, HP and Samsung (other than Microsoft itself) will play in the near future. That is where the PC market growth will come from. The desktop PC market is dying but the notebook PC market is stagnant and will still grow in the future since it has no competition as its definition changes.
        Now, will a consumer use a detachable PC device? That is debatable as seen from the mixed reception to Microsoft Surface devices. But will an enterprise/smb user use one? Absolutely. The market share stats will tell the same story in another year.
        We are in the midst of both consumer and enterprise device formfactor evolution and Microsoft, though it has lost the former, has a lock on the enterprise device (along with HP, Dell, Lenovo) and it does not look they will need to fear anyone in that OS software + device space yet. Not withstanding the slow response to Win 8 in the consumer market.
        5 years is the time between introduction of an OS product and its adoption in the enterprise/smb market. That is the historical sticky time for the OS product to mature. That is what Microsoft has – say from 2010 till 2015 or from 2012 till 2017 based on interpretation and actual market stats.

        • FalKirk

          First, I disagree that the 10″ tablet is dying.

          Second, where we primarily disagree is on hybrid or detachable computers. You see them as the future, I think they will be niche. Tablets are powered by touch user interfaces and notebooks and desktops thrive on pixel specific input devices like mouses, trackpads and styluses. The two interfaces are wholly incompatible which will keep the two form factors from merging.

          As always, time will tell who is wrong and who is right.

        • jfutral

          “But one deeper look at the stats and there is data…the 4″ smartphone is beating down the feature phone while the 5″/6″ smartphones/hybrid phablets will kill the 4″ smartphone. Isnt this one of the reasons that Apple has a problem?”

          Um, what stats and data in the US market are you seeing this? From all measures I’ve seen Apple does not have this problem and seem to be, not only holding very well, but with their older, smaller screen iPhones, growing. is that a problem?

          Joe

  • http://www.facebook.com/people/Ric-Frederick/1231721036 Ric Frederick

    All these columns about the death of Windows don’t make any sense. Even the Apple Macintosh was a failure when it launched on Jan. 24, 1984! Most people forget that Jobs left the company because of the fallout from the Mac.

    It was only with the creation of Aldus PageMaker and the introduction of the PostScript LaserWriter a year later (March 1985) that the Macintosh really started to sell.

    Windows 8 is a BRAND NEW operating system layered on top of their previous OS. It is as radically different from Windows 7 as Windows 1.0 was to DOS. What is hysterical is that both products (Windows 1.0 and Windows 8) are receiving nearly identical press. Both were deemed Dead on Arrival (DOA) by all the trade magazines.

    It is much too premature to write it off so soon. All it takes is ONE killer app to change the whole game.

    Looking back, it took NeXT from 1988 to 1999 to really take off as Mac OS X Server and then it wasn’t until iTunes that it really exploded.

    Of course, all the same arguments about mobile marketshare are spouted over and over, but while the trend is not currently favoring Microsoft, this game is anything but over.

    As an ex-Apple Enterprise Sales rep, I can tell you that Apple was ALWAYS the BYOD product. It was a hard sell then and it still is now.

    My point is that those who like Apple should not get too cocky about the demise of Microsoft, I have been down this road and fought many battles against them for most of my career. They are a tenacious company and will do whatever it takes to survive/win.

    • jfutral

      To be fair, the author wasn’t proclaiming the death of Windows, mostly Windows 8.

      “Windows 8 is a BRAND NEW operating system layered on top of their previous OS. It is as radically different from Windows 7 as Windows 1.0 was to DOS.”

      I think this over states the conditions. This is less a transition as Apple II to Mac as it is maybe OS 9 to OS X. In all your examples, both Apple and MS were starting at ground zero and had no where to go but up or out. Windows 8 is a continuation of the Windows OS brand after decades of success. At this point even Vista could arguably be considered more successful. This is neither an upstart company nor venture. And if OS X Server is an adequate analogy, that is a poor one to support Windows’ position. Talk about a non-entity division in Apple.

      If MS is truly starting from scratch with Windows 8, they certainly are not billing it as such. So far this is more like Zune than Windows. All their tenacity could not hold up that division. And that was when MS had more clout than they seem to do now.

      “but while the trend is not currently favoring Microsoft, this game is anything but over.”

      That definitely understates the trend, but I agree that the game is anything but over. Microsoft is nothing if not tenacious AND patient, especially with their crown jewel.

      Joe

      • steve_wildstrom

        I think there’s a lot of confusion in this thread between OSes and user interfaces. Under the hood, Windows 8 is a relatively minor update of Windows 7. The Desktop version of the UI is a somewhat bigger rethinking of the UI going back to Windows 95, while the Metro UI is radically new.

        To many users, UI and the OS itself may seem the same thing. Not so to developers. DOS to Windows 3–we can forget about the little-used 1 and 2–required radical rethinking by developers as we went from DOS function calls to Windows APIs and introduced a vast an complex new nomenclature. Mac OS 9 to OS X was also a radical change with an entirely new set of APIs (Carbon and Quartz for the UI.)

        By contrast, Desktop programs written for earlier versions of Windows run completely unmodified in Windows 8.

        • jfutral

          Good points, though I was talking more in terms of marketing, branding, corporate strategy, and the functional effect particularly to the consumer market. This is not the marketing and branding strategy of a brand new OS or product, as Windows 1 and the Mac before it. (And by your recounting and my recollection, it does seem like Windows 1 was actually DOA.)

          MS might have better success if they did market Windows 8 as a brand new OS even giving it a new name. I don’t know, maybe “Glass Frames”.

          Joe

    • FalKirk

      “It is much too premature to write (Windows 8) off so soon. All it takes is ONE killer app to change the whole game.” – Ric Frederick

      The future of computing is in phones and tablets. Windows 8 was Microsoft’s bid to transfer their user base from PCs to mobiles. That bid appears to have failed. Windows phones have little traction and Windows 8 tablets are tablets in name only. They are really netbook or notebook competitors.

      If Windows doesn’t move to mobile, then Windows will be left behind. If you can provide me with any data that shows that Windows has any significant presence in phones or tablets, then I will adjust my analysis accordingly.

      • http://www.facebook.com/people/Ric-Frederick/1231721036 Ric Frederick

        Your analysis is based upon a solution which has only been in the market for 6 months. I see NO examples of corporations throwing out their Windows platform for Android or iOS. Also, I disagree that “the future of computing is in phones and tablets,” those are simply new ways to getting to your data.

        Again, while corporations have been looking to provide support for mobile solutions, they are not planning to eliminate their long-term investments in Windows. People do not get productive work done on small screens the same way they do on large screens.

        I do believe that Microsoft is following the same formula they have used in the past… terrible initial marketing followed up by relentless selling on the back end.

        What most people who don’t sell into the channel fail to see is the VAST number of partners whose very existence relies upon Microsoft. They are the hidden sales channel which drives Microsofts products into the enterprise. I know because I compete against them.

        Apple always was and will always be a niche product in the enterprise. I give Google a better chance at winning over the enterprise. Yes, I know that iPhones are the rage today, but Blackberry was the rage only 5 years ago. Each year, we see new technologies which explode on the market only to flame out over time.

        Please show me the articles where iWorks beats Google docs and Office 365 at the enterprise level. Also, while I am on that subject, Microsoft’s future is damn near guaranteed when the DOD purchases an $800 million dollar contract to move everyone to Windows8/Office365. Where the D.O.D goes, most everyone will follow. Does DARPA ring a bell?

        Just because consumers love something doesn’t mean that corporations will embrace it. However, I cannot tell you the number of times that I have presented Apple technologies to school boards filled with ANGRY parents who argued that the school districts should spend tax payer dollars on the systems their children would be most likely to use as adults.

        The premise of my original reply was not to bash Apple, but rather, to point out that Microsoft is not done yet. And with all due respect to jfutral below, the author was proclaiming that Windows is dying with the release of Windows 8. And yes, in the eyes of the Consumers who I have talked to at the large computer stores around Dallas, they do see Windows 8 as a brand new OS. That’s why I have to show them it is merely a Dashboard on top of a Desktop and they then respond differently.

        Finally, as I stated previously, ONE killer app is all that is needed for Microsoft. With the XBOX, Microsoft bought Halo and that put the XBOX on the map.

        • Noah Berlove

          I think John’s point is that mobility is the killer app and Microsoft is still unprepared for this. Also, no one is saying iOS and Android are going to replace all Windows computers. However, there is growth in mobility not in the desktop market.

        • FalKirk

          “I see NO examples of corporations throwing out their Windows platform for Android or iOS” – Ric Frederick

          You’re not seeing because you’re looking in the wrong direction. In four years, from 2008 to 2012, Microsoft’s share of computing has dropped from 95% to 30%. That’s because computing has moved to phones and tablets and Windows has not moved to either.

          In your mind, corporations aren’t throwing out their Windows devices. In the real world, corporations have replaced 65% of their computing devices with non-Windows machines in a span of only 4 years. Just think about that for a minute.

        • jfutral

          “I do believe that Microsoft is following the same formula they have used in the past”

          In terms of the computing industry as a whole, this is a problem. From an enterprise perspective, you make a good deal of sense. The problem is the enterprise market is no longer the major computing industry it once was. It is shrinking, not just in size itself, but primarily in relation to the whole industry. The enterprise is no longer driving what consumers use.

          Now, WIndows 8 may be New Coke. Or it may be the newest “new and improved” Tide. But it is not Smith’s Garage OS waiting for a killer app to make them relevant. MS needs what Windows has done before to matter. And except for the enterprise, that is either what isn’t helping or may be exactly what is hurting, with Vista still fresh enough on people’s minds, for example.

          The next killer app is on the scene and it isn’t _an_ app, it is Apps. What post-modernism expresses most is a decentralization of power and you see it everywhere affecting pretty much each and every industry out there. It was only a matter of time before the old guard computing paradigms got hit, too. How MS responds to that will tell us if they have a chance or not. So far they don’t, except for the old bastions in enterprise. They may not need to respond as quickly as the media industries, but they will need to respond.

          Joe

  • Mhe She

    Microsoft and its hardware partners made the mistake of thinking that customers are idiots! They thought, customers would gladly pay obscene amounts for Windows tablets that:
    1. Had sub-par hardware (Atom tablets for $ 700 +)
    2. No apps designed for touch screen (Windows 8 store was just starting out)
    3. Neither a good laptop nor a good tablet.

    Microsoft is paying the price for underestimating the consumers. Grow up! Consumers are not idiots!

    Microsoft can do something about this and will probably do it with Windows Blue (next version):
    1. Consumers do not want a hybrid! Consumer does not want to use Office on a tablet. They buy the tablet to play, not to work.
    2. Microsoft has to bring down the prices. When consumers buy tablets for play, they will not pay more than a mid-end laptop!
    3. Apple cannot be beaten. Windows has to compete with Android 7-8 inch tablets. Build cheap Windows 8 tablets.
    4. Remember, Halo was responsible for Xbox success. Develop exclusive incredible games for Windows 8 (not a First Person shooter, but something that can be enjoyed on a tablet).
    5. Unify development tools for Windows Phone 8 and Windows 8 with the next version.

  • dogface

    I hate Microsoft because of Windows 8! I never actually hated Microsoft before this.
    The reason is I have no choice. I want a desktop operating system for my desktop, not this abomination of an OS . Game over Microsoft, you are not getting my money for anything after this. If I buy a tablet or smart phone I will not buy anything with a Microsoft OS. Just give us a choice and all this bs will probably go away and you will be on the way to
    make money. Are they too dumb to understand or they don’t care what their customers want?