Microsoft Needs Consumers to Adopt Windows 8... Fast

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Microsoft's (NASDAQ: MSFT  ) Windows 8 may be a better product than all of the other Windows offerings before it, but the company needs consumers to believe that -- and to buy it. As tablet sales climb and the number of mobile devices overtake PCs later this year, Microsoft is betting that consumers will use Windows 8 on PCs, tablets, and hybrids of the two.

Better, faster, cheaper
This week, The Wall Street Journal reported that Microsoft had cut the cost of its Windows 8 and Office 2013 bundle for original equipment manufacturers. Microsoft hasn't confirmed or denied the report, but if Microsoft is selling the bundle for $30, as opposed to the normal $120, it could be a great move by the Redmond company. Here's why.

Microsoft is more than a few steps behind in the mobile game. Surface tablet sales have been "modest" (according to Microsoft CEO Steve Ballmer) in a world dominated by Android and Apple's iPad. Microsoft took too long to adapt to mobile, and it's now playing a huge came of catch-up to stay relevant in this market. Windows 8 is a scalable OS that can be used on laptops and tablets and newer offerings like touchscreen laptops.

Microsoft dominates PC OS market share overall, but Windows 8 currently falls behind Apple's latest Mac OS X.

Source: Net Applications. 

Windows 8 only had 1.72% market share back in December, so the OS is moving its way up the OS ladder, but it still falls far behind the growth rate of its predecessor.

Source: CNET.

If Microsoft has lowered the licensing fee for Windows 8 and Office 2013, the savings could be passed on to consumers. The discount is reportedly for small computers with a screen size of 10.8 inches or less, and with touchscreen capabilities. With OEMS paying a cheaper price for the software and OS, and the savings passed on to consumers, Microsoft would have a greater chance to get the new OS into more hands.

Microsoft's strategy of only offering the discounts to small touchscreen laptops also helps the company transition from falling PC sales to an in-between market of hybrid tablets and laptops. Google just released a new Chromebook laptop with touchscreen capability, but its starting price is $1,300 -- much higher than the laptops receiving Microsoft's discount.

A touchy subject
It's yet to be seen whether touchscreen laptops will take off. Touchscreen laptops are generally more expensive than non-touchscreens, and so far sales have been slow. Last month, Best Buy offered $100 discount for two weeks on touchscreen laptops, with Microsoft, Best Buy, PC makers, and Intel absorbing the cost of the discount.

With the future of tech devices so closely tied to mobile, Microsoft investors need consumers to start adopting the Windows 8 OS. The company is betting its future on it. If Microsoft can get users to jump on board with Windows 8, the company may be able to bring consumers into its growing ecosystem of devices like the Surface tablet, Windows Phone, and future mobile offerings.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

Read/Post Comments (7) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 07, 2013, at 8:03 PM, techy46 wrote:

    Windows users are much more informed about their technical ecosystem and device choices then those of the other two major software ecosystems Apple and Andoriod. Windows users realize that Window 7 is great for productuvity and that Windows 8 must be adopted with a new touch screen hardware device. These devices like the Lenovo Yoga 11/13, Z400/500 and Helix are just starting to come online at $1000-1500 and require need Office 2013 licenses for $140-300 or $100 per year. So Windows 7 is still shipping and working and I'll get a Windows 8 device when I see the prices moderate as Intel's new Haswell chips drive existing i3-i7 device prices down. There no reason Microsoft needs people to buy Windows 8 any faster then they've bought any other Windows version.

  • Report this Comment On March 07, 2013, at 8:27 PM, NoWindows8LockIn wrote:

    "Windows 8 may be a better product than all of the other Windows offerings before.."

    The grammatically-correct term is "might", and I can already give you an answer: No, it is not.

    Windows 8 is rife with customer lock-in gimmicks. To long-time, shrewd Windows users, these gimmicks are obvious, and are a real turn-off. To those who are not as shrewd, Microsoft's intentions are not so evident, but many of them still hate the OS. They complain about how difficult it is to use, but not once ask ~WHY~ would Microsoft attempt these stunts when they are clearly so unpopular.

    In any case, whether the user is cognizant of Microsoft's tactics or not, it does not matter. It is still a detestable operating system compared to Windows 8.

    What's funny is that Microsoft could have:

    1. Fixed the bugs in Windows 7

    2. Added secure-boot (done right)

    3. Added a new paint job to the desktop,

    ...can called it Windows 8, and they probably would be selling more units. [I'm only half-joking.]

  • Report this Comment On March 07, 2013, at 8:28 PM, uncoveror wrote:

    Windows 8 is a Disaster. I am a professional in the industry, and found it to be so counter-intuitive and confusing that I had to go get a For Dummies book. Now I know how to use it, but still hate it! I want my start button back. I want pull-down menus, not the ribbon, and the metro interface makes it look like a toy for children, not a tool for work. Microsoft needs to just admit that they made a colossal mistake, and continue selling Windows 7. Offer so-called downgrade rights to all users, not just business users.

    I really thought that they couldn't screw up worse than Vista until I saw 8. Did they have a mole from Apple or the Linux community trying to sandbag Microsoft in charge of developing this, and not realize it? That is the best explanation I can imagine.

  • Report this Comment On March 07, 2013, at 8:41 PM, stetsonman123 wrote:

    I'm just an average Joe... I have a degree and everything. But, my opinion is just a regular, non-expert opinion. Ready? Here it is.

    I HATE WINDOWS 8!!!!!! Vista was more user friendly! Just improve Windows 7 already!

  • Report this Comment On March 08, 2013, at 1:57 AM, 9kguy wrote:

    I'm easing into Win8 on an i3 laptop and just got a Windows phone. Love it. Still use 7 on my desktops - no need to change yet. You'll need 8 if you go touchscreen, and you'll love it *IF* you take some time to learn a few things. I spend most of my time on the desktop, and it feels just like 7. You'll find better ways to navigate after you wean yourself off the start button. The "Windows 8 Tips and Tricks" app is a big help.

    I started out with CP/M and have been through nearly all of the win and mac O/S's (got a late start on macs). I think Microsoft got it right - very logical successor to Win7.

  • Report this Comment On March 08, 2013, at 1:14 PM, ronald1934 wrote:

    As a retired career computer engineer i help senior citizens who have bought Win 8 computers. It is a total disaster for them. The windows 8 screens are too hard to maneuver for them. I took one of their computers back to Win 7 so they could use it. The HP laptop had to be left with Win 8 because for HP products their is no backward step. Microsoft should make a Windows 7 upgrade, not this over engineered solution. When i was an engineer we always looked at customer REQUIREMENTS before desingning a software solution. It is obvious that Microsoft let the engineers run free rein without consulting future customers. I tell people DON"T BUY WIN 8.

  • Report this Comment On May 11, 2013, at 2:16 PM, Frey1370 wrote:

    Microsoft isn't run by their engineers -- it's the marketing department. They know that despite their cute, dancing tablet ads, they're probably not going to surpass iPad sales any time soon, so they're trying to leverage their desktop monopoly to get a leg up in tablets (just like they did years ago with their browser.) They figure that after their desktop customers get used to Windows 8, that they'll be attracted to Surface tablets because it's an interface they recognize. Never mind that a tablet/smartphone interface is a dismal choice for a desktop or laptop computer.

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