Should Microsoft Kill Windows 8 Immediately?

Microsoft (NASDAQ: MSFT  ) Windows 8 is totally killing the PC market. As if PC shipments weren't already stagnating, Windows 8 just knocked unit volumes down for the count.

The 14% decline in the first quarter that IDC estimated is the worst quarterly contraction in nearly 20 years. There were initial indications that Windows 8 wasn't taking off, such as when IDC pegged fourth-quarter PC units at negative 6.4%. The new operating system was released about a month into that quarter, so it was fair to say then that Windows 8 maybe just needed some time. It was simply too early to call it for sure.

Well, we can now call it for sure: Windows 8 has bombed. Don't just take my word for it. IDC's Bob O'Donnell makes it quite clear:

At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market. While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.

Windows 8 was a huge risk. It was a risk that Microsoft needed to take in the face of lackluster global PC shipments, but after five months on the market, the data show that consumers just aren't buying into Microsoft's vision, literally and figuratively. Users want the Start Menu back; some certified technicians even offer services to downgrade brand-new PCs back to Windows 7 (that'll be $125, please), allowing users to go back to the familiar interface and embrace of that OS.

Should Microsoft just kill Windows 8 immediately in order to minimize the damage it's doing to the PC market? That's not likely, considering how much time and money the software giant plunged into developing it. That would be about the toughest decision Microsoft could make.

This is before we even consider Windows RT, the less-capable variant that doesn't support legacy apps. Surface RT sales haven't made a dent in the market, and many OEMs are already abandoning the platform. Samsung just shuttered Windows RT sales in Europe, which it was using as a testing ground before possibly bringing those devices stateside. Other Windows RT OEMs are already dropping prices to clear out inventory.

Here's IDC's tablet guru Tom Mainelli last month:

Microsoft's decision to push two different tablet operating systems, Windows 8 and Windows RT, has yielded poor results in the market so far. Consumers aren't buying Windows RT's value proposition, and long term we think Microsoft and its partners would be better served by focusing their attention on improving Windows 8. Such a focus could drive better share growth in the tablet category down the road.

IDC is pegging Windows RT growth at less than 3% through 2017, while the overall tablet market is expected to double between 2013 and 2017. At the very least, Microsoft should axe Windows RT. It should probably drop Windows 8, too.

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 (14) | Recommend This Article (3)

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 April 13, 2013, at 12:03 AM, MiserblOF wrote:

    The PC isn't dead. It's mature. The market is saturated and the hardware has reached the speed and power level where people don't need a new machine every three years.

    Microsoft has to get used to the idea that there are very good operating systems available for nothing (e.g. Ubuntu) and they come with an office package to boot. Microsoft is not going to get away with soaking people for a hundred bucks every couple years to buy an OS that fixes some of the problems they created with the last one. Windows 7 is a good OS. They should build on that and forget about trying to sell hardware with their OS. Many people who have XP are happy and don't want to change, either.

  • Report this Comment On April 13, 2013, at 12:22 AM, NoWindows8LockIn wrote:

    It's not going to happen, but that is exactly what Microsoft should do. Microsoft was blinded by the greed that often plague CEO's who are more used-car salesman than technical visionary. Such CEO's engage in brutish tactics to hit their numbers, without consideration for why the company was so successful to begin with. History is littered with companies that follow this path: visionary founder grows it into a power-house, leaves to tend to family or billion $ philanthropic foundation,and while he is gone, his #2, an operations person, not a visionary, precedes to rape the good will of its customers.

    Microsoft should abandoned their vendor lock-in strategy. They should continue with the open version of Windows 8 on PC's, WITHOUT the Metro lock-in, but as an overlay on the desktop. They should keep their App Store, but make use of it optional. Most importantly, they should forget about RT, which is disgusting from a technical purists point of view, and simply put the real Windows 8 on it. The rumor that Windows 8 is too power-hungry for tablets is a flat-out lie. In fact, underneath RT is..guess what...the Windows 8 kernel.

    That's actually the solution. Quite boring, but very powerful for hitting financials. Put the open form of Windows 8 on all devices.

    This strategy would create an avalanche of developer loyalty that would cause hard, fast, and mass destruction against Android, and probably a bit of Apple too.

  • Report this Comment On April 13, 2013, at 8:09 AM, SawItComing wrote:

    Microsoft needs to fire its entire executive staff. They steered this ship into the iceberg everyone saw coming - except for them apparently. Windows 7 is a fantastic operating system (especially on the heels of Vista). No one was asking for a tablet-friendly PC operating system, and while I know that sometimes being visionary means giving people something they don't know they need, the changes in Windows 8 were well known in advance of its release and many were already decrying them. So why did Microsoft just ignore the critics and attempt to crush its own successful product (Windows 7)? Terrible leadership that's why. So how Ballmer is still at the helm is a complete mystery to me and only signals Microsoft is even more lost than we think.

  • Report this Comment On April 13, 2013, at 11:26 AM, bugmenot wrote:

    Windows 8 would cost most businesses MEGABUCKS in retraining costs and more MEGABUCKS in reduced productivity. Employees have learned over the years how to maximize their effectiveness on the Windows applications needed to do their job. While MS has to provide a tablet interface as it moves forward, it can't force users to the tablet only mode. MS must provide backward compatibility or businesses can't use their product. The tablet interface as to grow and be introduced slowly to new applications. Now the home user is equally befuddled. All I do is surf the net, email friends, some online shopping, and bill pay. Why do I need to learn a completely new interface?

  • Report this Comment On April 13, 2013, at 12:32 PM, snommis69 wrote:

    This article is as misguided as Windows 8.

    Windows 8 is Microsoft's reply to the fact that the PC IS dying. It's a transition away from the desktop without abandoning it - an evolutionary move. Was that a mistake? Maybe. I agree that, interface-wise, it's a big step away from the old Start menu we've known since Windows NT, but it's not a big enough step away toward Android/Chrome levels. So, in short, they moved toward mobile and away from PC, but landed in the middle, doing both poorly.

    Honestly, no one should be shocked. Microsoft is following their pattern. Every other OS is a hit. 8 is today's Vista. Remember how well THAT was received? Still, they didn't kill Vista, they learned and moved on, just like they will now.

  • Report this Comment On April 13, 2013, at 2:27 PM, SawItComing wrote:

    snommis69,

    I have to disagree. Yes the explosion of tablets and decrease in PC sales the past few years could lead some to believe the PC was "dead".

    However, once you understand that they are 2 different technologies (and even markets) that ultimately serve similar, yet different purposes, the decrease in PC sales hints at a different problem: There have just not been significant advancements in the PC market to warrant upgrades from the average user.

    Many people are still running Windows XP and even Office 2003. Why? Because it serves their needs and the cost of re-learning any of the new Windows/Office upgrades since then outweighs the benefits for them.

    People want tablets for several reasons: They're portable, simple and serve other functions that PC's can't or don't. How many desktops do you know have a gyroscope, proximity and ambient light sensors, an accelerometer and a digital compass?

    But that doesn't mean they don't want/need a PC as well. I have several tablets, which I use heavily, but I still use my PC for work, browsing, and video/photo editing. For instance, I'm typing this on my PC right now.

    Can a new device come along that replaces the PC? Possibly, but it is not here yet. Windows just needs to give people a reason to upgrade their PC, but they have to stop trying to make the PC a tablet.

  • Report this Comment On April 13, 2013, at 6:51 PM, The1MAGE wrote:

    The only reason I bought a new PC was because my old one died. (Too early.)

    I generally have a wait and see attitude on stuff like this. I generally like to be late into the game, that way they have dealt with all the bugs and problems, and also so I know if there is a serious problem with it.

    With Windows 8, took a little getting used to, but not a problem for me. And I really like the much quicker boot.

    I am annoyed by their home screen. Mostly by how when you try to move something into place, it wants to move everything else to make room, when I already had stuff where I wanted it.

    Also I wonder why they left their regular screen to go to these box things. The boxes may look nice, but they cluster together too much, and it can make it harder to find what your looking for. More often then not I am working on the desktop.

    I do like the idea of a Windows tablet, but what is the draw for sales? When you have people waiting in line for the next new product, or software, there must be something to draw them in. People already had their tablets, and they already had windows on their pc's. There was no real big innovation here that would draw people in.

    Then again I don't see this as Microsoft trying to take over the market, though they probably wanted to, but instead as a way to stay relevant. In other words if they couldn't win the game right now, this may at least keep them in the game.

  • Report this Comment On April 13, 2013, at 9:05 PM, FiendishFig wrote:

    New here, but not the great first start. You could have just posted a link to the article and saved the time of copy and pasting the entire article.

    http://www.insidermonkey.com/blog/microsoft-corporation-msft...

  • Report this Comment On April 13, 2013, at 10:33 PM, mikecolee wrote:

    Sure seems that MSFT bashing is in vogue now. I have a little Asus vivotab smart and it is so much nicer that the android tablets I have used. The live tiles are brilliant. The thing boots fast, goes 9 hours on a charge and wakes from sleep instantly. The tile screen is so much more usable than the old start button. IE 10 is super fast as well. All this on the clover trail SOC... If bay trail is 2x clover then those of us that prefer windows will have our cake and eat it too! Well done Microsoft.

  • Report this Comment On April 14, 2013, at 3:41 AM, noseb1eed wrote:

    I use HP computers. I have Windows 7 pro on one system and Windows 8 on the other PC system. Classicshell (free) desktop is installed (overlay) on both, to keep the "look and feel" of a simple desktop OS (XP) across both PC's. Sound like a Mac ? The new Mac OS's look and feel like the old Mac OS's, so as they are upgraded (hardware or OS) you still know how to use a Mac any old or new Mac. I can switch my HP windows 8 from the XP desktop with a shift click on the XP start button. Then I can learn at my leisure how to use windows 8 touch metaphor without clogging up day to day requirements to use a desk fixture PC system. Not a mobile niche goodie. I do not have a touch monitor yet. I use the Logitech touchpad to control the Windows 8 screen functions, waiting for Leap Motions finger motion control device to be released. I agree with what you say if you tone down the "all or nothing". If Microsoft and Intel and other PC hardware folks start moving the PC forward again. ( if Moore's Law isn't abandoned) instead (imho) of profit taking with the stagnant 2.9ghz to 3.5ghz PC box and associated memory, hard disks. The PC pretty much has reached the maximum peak it can be developed and still should be a home appliance, and office tool as intended. Certainly the mobile party can go on and let the money flow from the consumer. Ending the PC just to let mobile make a larger market share might actually happen as the consumer mobile dollar is "shilled" away from the PC world market share. Cash Cow branding on certain mobile devices begins as the mobile party winds down. I intend on riding out the PC transition, and it looks like the PC industry could survive the new mobile niche. When folks start paying attention to where their mobile money is going, and the general party time mobile fad wears down, will the mobile devices survive ?

  • Report this Comment On April 14, 2013, at 7:32 PM, BobvillaHome wrote:

    Look PC decline is a decline in PC's. ie new tablets, phones instead of pc's. Has nothing to do with operating system. Ie windows 8

    If people actually learned to use the windows key. Everything is basically the same except the start screen. If my 6 year old can figure out how to use it without a manual maybe the rest of you can. If not, you have bigger problems.

  • Report this Comment On April 16, 2013, at 11:36 AM, forkicks wrote:

    @Bobvillahome: Your 6 year old does not have 20 years of previous experience and reflex memory on how to use an operating system, hence the faster learning curve.

    But an OS that hides options out of sight, makes discoverability a nightmare, and turns 24" screens into single window launchers, is not really a good OS.

    And it could all have been so simple if microsoft did the obvious and provided an "OPTION" to enable/disable this metro crap. Say, something revolutionary like what existed in -every- -single- -other- windows version, akin to "enable classic desktop".

    But anyway, they'll learn the hard way, with their pockets.

  • Report this Comment On April 18, 2013, at 6:40 PM, snommis69 wrote:

    @SawItComing, I'm at IT pro by trade - I completely understand that it is two different markets. Still, the desktop (PC) market is fading fast, as home users abandon it for tablets and whatnot, and many businesses are as well. I honestly think tablets are little more than niche items in the professional world, for the most part. As for home users, the desktop PC will die eventually, as laptops (still technically a "PC"), tablets and phones replace them for every day light browsing tasks.

    My point was simple - that Windows 8 is a bridge product.

  • Report this Comment On April 18, 2013, at 6:42 PM, snommis69 wrote:

    I also find it amusing that MSFT announced today that 8 pumped their profits 19%! Yeah, what a dog. LOL

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2361391, ~/Articles/ArticleHandler.aspx, 12/19/2014 10:52:20 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement