With all the news coming out of CES this week, I couldn’t help but be struck by the lack of “buzz” surrounding Microsoft’s Windows 8 tablets. Microsoft and its partners just introduced a slew of new hardware and software products, but the response at CES has been muted, at best. In fact, it seems to me that the start of 2013 has been very negative for the technology giant from Redmond.
— Apple’s falling stock prices have been getting all the attention, but while Apple’s stock ended the year up 30%, Microsoft only had a year long gain of 2%.
— Sales of Windows 8 tablets have been tepid, at best.
— According to NPD, overall Windows sales dropped 11% during the holidays.
— And next year isn’t looking any better with Sterne Agee analyst, Shaw Wu, projecting a 2% growth rate for the PC side of the industry.
— Windows 8 tablets have been criticized as being “confusing” both by analysts and some of Microsoft’s manufacturing partners.
— Windows Phone – which was already struggling — has an industry low 37% repurchase rate. (EDIT: This low number may be a reflection of discontinued Windows Phone 7 devices.)
— Microsoft even had to suffer the indignity of having thieves break into one of their offices and only steal Apple products — ‘No Microsoft products were reported stolen’
“Redmond, We Have A Problem”
Here’s Microsoft’s real problem: They shot their bolt with Windows 8 and they badly missed the mark. They looked at the wildly successful Apple iPad and decided that it was a flawed product. Instead of creating a tablet, Microsoft created a hybrid with the basic assumption that what the market really wanted was a tablet that could act as a notebook PC. It’s still early, but so far the marketplace is telling Microsoft that they got it wrong.
“Microsoft doesn’t have a credible response” to expensive tablets like the iPad, or cheap tablets like the Kindle Fire, Google Nexus, or iPad Mini, and that’s what’s hurting Windows consumer sales.” ~ Shaw Wu
While Microsoft Fiddles, Their Monopoly Burns
Nero was famed for fiddling while Rome burned. And like Nero, while Microsoft fiddles with hybrids, their business monopoly is burning. Businesses aren’t waiting around for Microsoft to get their mobile act together. They’re moving on and they’re moving away from Windows.
— Trip Chowdhry, a managing director at Global Equities Research, has put out a research note estimating that Apple sold between 3 million and 4 million iPhones to businesses over the past quarter.
— In a recent analyst survey, the percentage of CIOs who said they’d conduct “broad” tablet rollouts jumped to 15 percent for this year from just 4 percent last year.
— Companies have also found they can save money by letting staffers use their own personal smartphones and tablets at work. Combine that with the corporate trend of avoiding new PC purchases and it paints a very bleak picture for Microsoft’s personal computing efforts.
Conclusion
“Apple’s iPad…now has a starting price of $329 with the entry-level iPad mini. … Windows 8 hardware priced between $500 and $1,200 is ‘uncompetitive’ compared to lower-priced options from Apple and even Google’s Android. ~ Sterne Agee analyst, Shaw Wu
In the fall of 2012, Microsoft planted the seeds for their future in personal computing. If the early signs are any indication, they may not be pleased with what they reap.