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4/25/2013
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Windows 8 Sells Best On New Tablets

New reports reveal what Microsoft would not in its recent earnings meeting: Windows 8's 7.5% share of the tablet space is around double its overall market penetration.

8 Things Microsoft Could Do To Save Windows 8
8 Things Microsoft Could Do To Save Windows 8
(click image for slideshow)
When Microsoft announced in its recent earnings report that Windows revenue had increased, the company scored an ostensible victory over the many critics lambasting its newest operating system, Windows 8. It was a hollow victory, however, given that the gains relied on deferred revenue, and that Microsoft declined to dissect how much of the revenue came from Windows 7. For the purposes of assessing Windows 8's progress, in other words, the earnings report offered few new details.

Separate studies published this week by research firms Forrester and Strategy Analytics seek to fill in some of the gaps in Microsoft's report, and although the news isn't stellar for Windows 8, it's not that bad, either.

Forrester found that although Windows 7 is the most popular OS in the enterprise, with 47.5% of the market, almost two out of every five machines still run its predecessor, Windows XP. The subtext, given that Microsoft will stop supporting XP in less than a year, is that a lot of companies are still scrambling to update their aging systems. With Windows 8 still a niche player in the workplace, the setting is right for Windows 7 to maintain robust sales. This is good news for Microsoft in the short term, as it means Win8 has been able to endure growing pains without negatively affecting Microsoft's bottom line. Even so, Windows 7 sales don't silence ongoing uncertainty regarding Windows 8's long-term viability.

[ Many are giving touch-enable Windows 8 a wide berth. Read Tell Me Again: Why Rush Into Windows 8?. ]

Microsoft claimed in January that 60 million Windows 8 licenses had shipped and that the OS was broadly keeping pace with Windows 7. This optimism seemed incongruous with external viewpoints, which have cited poor PC sales and a variety of other factors to argue Win8's real-world impact has been substantially more mild.

There also have been indications that, among enterprise customers, few XP holdouts are jumping directly to Windows 8, whose touch-oriented interface has so far struck business users as more burdensome than empowering. The result is that Win8 has been able to struggle without negatively affecting Microsoft's bottom line. But with the new OS's potential unclear, Microsoft's long-term outlook is more enigmatic.

That's where the Strategy Analytics data enters the equation. The firm found that 3 million Windows 8 tablets were sold in the first three months of 2013, and that the OS commanded 7.5% of the tablet market. This number is by no means a home run; Apple sold 19.5 million iPads during the same period, and Android is poised to surpass Apple for the industry's overall lead. But based on separate estimates released in March by market watchers Net Applications and StatCounter, Win8's 7.5% share of the tablet space is around double its overall market penetration.

Windows 8 defenders have argued that the OS is best enjoyed on touch-enabled devices. With PC sales down, however, many Win8 licenses have been installed, to lackluster effect, on previous-generation hardware. That the OS's tablet momentum evidently outpaces its overall growth by such a wide margin reasserts this notion. As a Windows 7 replacement, in other words, Microsoft's newest offering hasn't performed well. But as a foray into the tablet space, Windows 8 has actually fared decently.

There are many reasons to expect this growth will continue. One is Windows 8.1, a forthcoming update, previously code named Windows Blue, that is expected to improve many of the UI's most divisive elements, including potentially reinstating the Start button and more smoothly integrating its traditional desktop environment with its tactile-themed Live Tiles UI.

Small tablets are another avenue for sustained growth. Win8's current tablet share has been amassed without an entrant in the industry's fastest-growing race: the market for small, cheap devices, currently dominated by the iPad Mini, Nexus 7 and similar models. But Microsoft has acknowledged, after months of rumors, that 8-inch Windows 8 tablets are coming. Outgoing Intel CEO Paul Otellini suggested these new products will be priced aggressively. Between Windows Blue and a slew of new devices, the platform should only expand its reach into the mobile arena. The question is, by how much?

Windows 8 has a lot of ground to make up. It would be surprising if the OS can challenge Apple for second place in the tablet market, even if Microsoft and its partners' new offerings deliver. Between the mediocre Win8 outlook at the consumer level and a lack of enthusiasm for the OS among enterprises, Microsoft continues to face unanswered questions. Analysts expect Microsoft to be a huge player for years to come, but few anticipate Microsoft can remain as dominant as it's been in the past.

Tapping into this theme, Forrester's report emphasizes that Windows 7, although a phenomenal success by any measure, is not as ubiquitous as Windows XP was during its heyday. XP once claimed more than 80% of business desktops, and even with a number of enterprises currently updating their systems, it's not clear if Win7 can reach such stratospheric heights. Forrester noted that OS X, though not a challenger to the Windows majority, has become more accepted as a business platform. Such erosion in Microsoft's traditional user base, as well Windows 8's modest gains in the consumer and bring-your-own-device segments, reiterates what many analysts said after Microsoft announced its earnings: at most businesses, IT departments will have to support multi-OS environments because the days of a de facto Windows monopoly are over.

Some version of Windows will be one of these supported platforms, of course, and for certain users, Microsoft's flagship product will continue to be the only realistic option for years to come. But as more platforms jostle for enterprise adoption and influence, and as consumerization trends continue to affect IT policies, it's not clear where in the pecking order Microsoft will ultimately land.

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ja_1410
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ja_1410,
User Rank: Apprentice
4/27/2013 | 1:56:10 PM
re: Windows 8 Sells Best On New Tablets
Are you sure that those are actual sales ? How do we know that the devices delivered to stores were actually sold to consumers ? In an unrelated news Microsoft again lowered the prices on Windows 8 devices. That seem to indicate that things are not going well for Windows 8. The only time Apple lowered prices on iPads was three or four days during 2012 black Friday.
Ramon S
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Ramon S,
User Rank: Apprentice
4/27/2013 | 12:42:05 PM
re: Windows 8 Sells Best On New Tablets
So we take a desktop OS and stuff it into a tablet format and hooray we have a mobile strategy! It is still up for discussion if the Surface Pro can even be considered a tablet as it lacks most of a tablet's characteristics.
Michael Endler
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Michael Endler,
User Rank: Author
4/27/2013 | 12:52:15 AM
re: Windows 8 Sells Best On New Tablets
Thanks for reading, and for sharing your experiences with Windows 8.

I've gone into pretty heavy detail elsewhere regarding the varied reasons that many users are dissatisfied with Windows 8, just as I've gone into detail about why Windows Blue might - and I emphasize "might" - clean things up. Some of the other reporters who cover Microsoft have done likewise. Given deadlines and this past coverage (some of which is linked in this article), I didn't belabor the issues of user discontent in this case. Even so, I don't think this article neglects user dissatisfaction.

For example:

"With PC sales down, however, many Win8 licenses have been installed, to lackluster effect, on previous-generation hardware";

"As a Windows 7 replacement, in other words, Microsoft's newest offering hasn't performed well";

"There also have been indications that, among
enterprise customers, few XP holdouts are jumping directly to Windows 8,
whose touch-oriented interface has so far struck business users as more
burdensome than empowering."

I could have used more aggressive language, I suppose, but the idea that Windows 8 isn't meeting the needs of desktop users is pretty pervasive in the article. Indeed, it was sort of the point; Windows 8's desktop market share is pretty lackluster compared to what its predecessors' achieved at the same point in their respective life cycles, which not only makes Win8's relative tablet success noteworthy but also reinforces that, for most users, the OS has been a flop on the desktop.

But yes, your frustrations are unfortunately (for Microsoft, at least) a common theme. I understand why Windows 8 has defenders, but even people in this camp tend to say things like, "It's great, once you've learned how it works." User-friendliness hasn't been part of the OS's identity, so far.
DAVIDINIL
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DAVIDINIL,
User Rank: Strategist
4/27/2013 | 12:03:21 AM
re: Windows 8 Sells Best On New Tablets
The story author does a marvelous job of dancing around the idea that Windows 8 is complete utter failure on the desktop. Amongst other awful features, I tried to establish an additional user account on my son's laptop. Win 8 would not let me do so because I could not establish a connection w/ MS's servers. Even tho I had a working internet connection. If this were an isolated "feature" it would not be so bad. But it is not, Win 8 is torture to use. I dare say the federal government is more user friendly than Win 8.
Michael Endler
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Michael Endler,
User Rank: Author
4/26/2013 | 8:14:10 PM
re: Windows 8 Sells Best On New Tablets
Also worth noting: the fact that Windows 8 adoption has evidently been better on tablets than PCs and clamshell Ultrabooks has implications outside of Microsoft. Windows 8.1 devices will use Atom, Core, and ARM processors. iPads will continue to use ARM chips, unless the Intel A6 rumor is true. Android will be largely ARM with some Atom chips in the mix. Smartphones have largely shunned Atom chips so far. There's a lot of movement in the chipmaker universe, in other words, and Windows 8 isn't an inconsequential factor in how the cards ultimately fall.
Michael Endler
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Michael Endler,
User Rank: Author
4/26/2013 | 8:06:26 PM
re: Windows 8 Sells Best On New Tablets
Yes, Windows 8 is mandatory on Windows 8 tablets. But that's not really the point.

Windows 8 has amassed more market share on tablets than on PCs. No one FORCED consumers into buying these tablet products. Thus, the fact that tablet adoption has outpaced overall adoption lends credence to the notion that though Windows 8 is winning few fans among desktop users, it's NOT an abject failure among tablet users. That's the point.

To be clear, the Win8 tablets' decent showing doesn't PROVE that the OS is satisfying tablet users. The market gains could speak to the number of people who were curious, the number of people willing to accept compromises just so they could use Office on a tablet, etc. If Windows 8.1 and Haswell/ Bay Trail don't lead to meaningful gains, the entire Live Tiles experiment will be on shaky ground.

But for all the (frankly myopic) talk about how Windows 8 has killed the PC, it's noteworthy that the OS has fared decently in the tablet space. Mobile, BYOD-friendly devices are, after all, where Microsoft really needed to make a splash. The desktop market will be wrapped around Windows 7 for years, so even though Redmond isn't without worry in that space, PCs don't represent the same urgency that tablets and smartphones do. Microsoft will need to figure out how to unite the two camps of users, and I'm not convinced yet that Windows 8.1 will deliver the solution. But Windows 8 victories have been in short supply, and I think the tablet market share qualifies as at least a mini-triumph. Even if the sales only amount to hitting a single, it at least means that Microsoft is on first base and still in the game. A lot of people were assuming that Redmond had already struck out.
Number 6
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Number 6,
User Rank: Moderator
4/26/2013 | 7:48:39 PM
re: Windows 8 Sells Best On New Tablets
It is if consumers are buying Windows 8 tablets.
zman58
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zman58,
User Rank: Strategist
4/26/2013 | 7:36:43 PM
re: Windows 8 Sells Best On New Tablets
Let me get this straight; Windows 8 sells best on new Windows 8 tablets.

Imagine that--locked up hardware with OS embedded. As if there was a choice? Where are we going this this? Is that considered a win?
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