Windows 8: It’s Later For Microsoft Than You Think

on October 23, 2012
Reading Time: 4 minutes

Microsoft Needs To Hurry

Microsoft has two problems. The first is that they have no presence in mobile and mobile is where it’s at. The second, is that they’ve run out of time.

Run out of time? How is that possible? The iPhone is only 5 years old. Android is only 4 years old. The iPad only appeared on the market 2 and a half years ago. How can it possibly be that Microsoft is out of time? Three things:

1) PC sales are declining fast;
2) Smartphones, and especially tablets, are being adopted at historically unprecedented rates; and
3) Microsoft’s absence from the market has been ceding the mobile computing business to Apple.

1) PC Sales Are Declining Fast

Both Gartner and IDC concur that worldwide PC sales fell by over 8%. Ultrabook sales forcasts were slashed in half for 2012 from 22 million to 10.3 million.

But as bad as that looks, it’s actually a lot worse than that if you’re Microsoft. If you take out the Apple Mac sales, PC sales in the U.S. actually shrank by 13.8%. And, naturally, as PC sales shrink, so do Microsofts profits.

It’s not so much that PCs are in decline – it’s PCs running Microsoft windows that are in decline. And the decline is not temporary, it’s permanent. As Mike Gualtieri, principal analyst at Forrester Research, put it:

“I don’t think [Windows 8] is going to turn [the PC industry] around because nothing’s going to turn it around…”

2) Smartphones, and especially tablets, are being adopted at historically unprecedented rates

It’s not computing sales that are down, it’s only PC sales that are down. If you add tablets with PCs, overall sales of computing devices (excluding smartphones) will actually RISE by 12% this year.

Smartphone sales grew so quickly that they surpassed PC sales in late 2010. And the rise of tablets has been even faster and has been even more spectacular. No other technology has penetrated society so quickly. By the end of this year, tablet sales will jump 90 percent to 124 million units or just over 35 percent of the total PC sales for this year. Tablet sales are expected to outsell PCs by 2016, if not sooner.

Market Penetration

Within 18 months after the introduction of the iPad, tablet penetration among U.S. housholds hit 11%. 12 months later it was at 25%.

A Lost Generation

Microsoft has lost an entire generation of users. Don’t believe me?

40% of U.S. teens own an Apple iPhone. 62% want one.

— More than half (51 percent) of tablet users think that their tablet will be their primary computing device within the next two years.

Microsoft’s absence from the market has been ceding the mobile computing business to Apple

Business has long been a Microsoft bastion. It’s been estimated that as many as 92% of all business personal computers once ran on Windows powered machines.

Consumerization and BYOD

But Apple is riding the crest of the “consumerization of IT” trend. Truth be told, Apple isn’t riding the wave, it CREATED the wave. For most companies, BYOD doesn’t mean “bring your own device” to work, it means “bring your own iOS device” to work.

Business Adoption

94 percent of the Fortune 500 companies are either testing or deploying iPads. Some 70 percent of the Global 500 companies are testing or deploying iPads, too. 3 in 4 American enterprises have adopted the tablet in some way.

And when 500 of the UK Chief Information Officers (CIO) were polled, 37% choose the iPhone to be the dominant business smartphone in the the next few years.

“The role of the iPad cannot be overemphasized. Some observers estimate the iPad sales in the business market might represent up to half of all iPad sales,” ~ Charlie Wolf, Needham & Co.

Use In The Workplace

77% of tablet users report that their destop usage decreased after getting a tablet. 1 in 4 owners say their tablet is now their primary computer.

Indispensable

Not only has the iPad stolen a march on Microsoft in business, it’s going to be hard to dislodge. People love their iPads. In a quirky poll taken earlier this year:

— Almost half of respondents (47 percent) said they’d rather have an iPad for work than a bigger or better office or a more senior title (34 percent).

— Sixty-eight percent said they’d rather have an iPad than their own parking space at work, while almost one in four (23 percent) would prefer the tablet over an extra week of vacation each year.

— When asked what they would go without before they would give up travel with their iPad, nearly half (48 percent) say they would forego meals, 41 percent would skip drinking water, and more than 1 in 3 (35 percent) would give up bathroom breaks. More than half (55 percent) said they would rather forget deodorant than forget their iPad.

Headlines

Read these headlines and tell me that Microsoft should not be terrified. Many of the headlines have to do with the demise of RIM, but notice that the busienss is moving to Apple and Android – not Microsoft:

More car companies link iPhone nav apps to dashboard displays

The iPad Kiosk: Landing at an Airport Near You

Urban Outfitters Replaces All Cash Registers With iPads

BlackBerry Dropped by Booz Allen for Apple, Android

Australia’s Woolworths drops RIM for iPhones

U.S. Immigration and Customs (ICE) dropping RIM BlackBerry and purchasing 17,000 Apple iPhones

Windows 8 Is Late

Windows 8 is arriving on Friday, October, 26th and it’s none too soon…

…in fact, as far as mobile goes, it may already be too late.