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PC makers need to refocus after Windows 8 pushes PC sales off a cliff

Column What next for desktops and laptops
Fri Apr 12 2013, 16:32

SIX MONTHS AGO I predicted that Windows 8 would be a disaster, more than a month before Microsoft released its latest OS in October.

Microsoft should have had the sense to understand that trying to unify the visual metaphors inherent in PC desktops with those natural to touchscreen tablets and smartphones was a fool's errand. But apparently it didn't realise this, or at least it went ahead and tried to force the convoluted system that resulted on the market, including its rather large base of Windows PC users.

PC hardware OEMs weren't happy when they found out that Microsoft planned to compete with them by building its own ARM and x86-based tablets, the Surface RT and Surface Pro, respectively. However, they depend on Microsoft so they couldn't do anything about it.

Even Intel had serious doubts about Windows 8 just before it was released, but it was forced to back off after news of its misgivings leaked to the press.

PC makers had no choice but to follow Microsoft and design laptops with touchscreens for Windows 8, despite any dissatisfaction about Microsoft competing with them in the tablet market. Such is the power of Microsoft that PC vendors were compelled to produce Windows 8 machines, even if they strongly suspected that consumers wouldn't like it and therefore PCs based on it weren't going to sell very well.

Indeed, PC sales during the Christmas holidays buying season were lower than expected and the lack of demand for Windows 8 was blamed for the disappointing hardware sales, as we reported at the time.

But maybe that disappointing holiday season was down to lack of consumer confidence, along with economic constraints. Perhaps people didn't have very much money to spend.

However, first quarter PC sales results reported yesterday have shown that my predictions were right. Windows 8 has been, for the PC industry as a whole if not immediately for Microsoft, a disaster. 

Here's a brief summary of evidence to support the above claim. IDC reported that first quarter global PC shipments fell 14 percent. Gartner reckoned the drop at 11 percent, because it counted hybrid laptop/tablet machines as PCs. First place HP's PC sales fell nearly 24 percent, Lenovo's sales were flat, Dell's sales were down almost 11 percent, Acer's sales fell more than 31 percent and Asus' sales were off by 10 percent.

Even the mainstream media in the US noticed that PC sales fell off a cliff in the first quarter, and placed a large part of the blame squarely where it belongs, on Windows 8. The Associated Press said, in an article that appeared in many US newspapers and on their websites, "All signs so far point to Windows 8 being a flop."

Microsoft's update to Windows 8 called Windows Blue won't resolve the problem. That's going to be merely an incremental upgrade to add cosmetic details and provide features that should have been in the initial release anyway. That's just how Microsoft always works. People with long memories might recall that the first release of Microsoft Windows that worked was Windows 3.1, that is, the third version, plus one update.

The question facing the PC industry now is, what should it do about this? I would like to offer a suggestion.

In the last 10 years Microsoft has blundered twice in its attempts to redevelop Windows and force yet another operating system driven refresh cycle on the maturing PC market. It barely managed to do what was needed to fix its awful Windows Vista with Windows 7, but then it turned right around and stepped on itself and all the PC makers again with its poorly envisioned design of Windows 8.

Perhaps PC manufacturers should recognise that they are too dependent on Microsoft. The danger represented by a software monoculture doesn't apply to just system security, it also applies to their business models. PC makers should look at what Windows 8 cost them in terms of sales volume, and develop software source alternatives to Microsoft.

At least one PC vendor might understand this already and is taking steps to become more independent of Microsoft's desktop and tablet OS. Dell is selling a high-end Alienware X51 gaming system that is preloaded not with Windows, but with Ubuntu Linux. Although Dell has also just signed a deal with the Redmond firm to license Windows Embedded, so it's not quite cutting ties with Microsoft yet.

Still, other PC makers should also find and adopt such Linux alternatives, and there are several good user friendly distributions to choose from, including but not limited to Ubuntu.

Creating Windows 7 in order to recover from Windows Vista took Microsoft almost three years. Now it will have to fall back on Windows 7 replacement of Windows XP systems to maintain its revenue stream, and perhaps leave Windows 8 as a tablet operating system. If it attempts to fix Windows 8, that effort might take it three to five years.

With any luck, by then PC vendors, having been badly burned twice by Microsoft, might have diversified their operating system choices, and the PC market will have moved on. µ


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