Is This Microsoft's Last Chance to Get It Right?

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The clock is ticking on Microsoft  (NASDAQ: MSFT  ) .

The world's largest software company has set a date for its long overdue update to its flagship PC operating system. Windows 8.1 will become available on October 18, offering new personalization features, the refreshed Internet Explorer 11 browser, and several other features that may help consumers get over the initial shock of last October's poorly received Windows 8 rollout.

Naturally, Microsoft won't call Windows 8 a flop. On paper, Mr. Softy has activated a ton of licenses. There has been no shortage of criticism for the learning curve involved in getting to know the platform that was built from the ground up with touch-based devices in mind, but the boo birds aren't as loud as we witnessed when Apple (NASDAQ: AAPL  ) picked Vista apart.

However, perhaps the reason why Apple isn't rolling out "I'm a Mac" ads to take down Windows 8 is that the pie itself is shrinking. 

Industry tracker Gartner reported its quarterly metrics for the PC market last month, showing that worldwide shipments of desktops and laptops fell a brutal 10.9% to 76 million units. This was the unprecedented fifth straight quarter of declines for the industry, and Microsoft can't hide from the cruel math. PC sales have grown less popular since Windows 8 hit the market.

Apple also isn't going to be taking shots at Windows because it's no longer Public Enemy No. 1 for the Cupertino tech giant. Consumers are flocking to tablet and smartphones where Google's (NASDAQ: GOOGL  ) Android is the operating system of choice. 

Microsoft isn't a total loser here. It does collect patent royalties from Android. However, Microsoft has been a failure in the mobile computing markets, where its market share in smartphones and tablets clocks in at a mere 4%. There's little reason to expect that to change anytime soon, and its best shot at regaining relevance is to make sure that the PC market bounces back.

It won't be easy. The market has made up its mind, even though consumers are still buying more PCs than tablets. If Windows 8.1 doesn't win back mainstream users that are perfectly fine with surfing the Web, streaming media, and running apps on their "good enough" mobile computing gadgetry, will anyone still care about Windows 8.2 or Windows 9?

Microsoft isn't going away. It's too rich and entrenched for that to happen. However, Microsoft's gradual fade to irrelevancy is real. If October's update doesn't do the trick, investing in Mr. Softy won't be a treat.   

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Read/Post Comments (14) | Recommend This Article (9)

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 August 14, 2013, at 8:21 PM, techy46 wrote:

    Windows 8.1 is only the first update. It's usually the 2nd Windows update, Wndows 8.2, that's the Gold version and then it turns to Platinum at update 4. I wish I had a failure that sold 100,000,000 copies at $50 each while the prior tune was still finishing selling over 500,000,000 copies at $50 each. Has Apple sold 500,000,000 million of anything? Google's given away 1 billion copies of Android free.

  • Report this Comment On August 14, 2013, at 8:21 PM, marv08 wrote:

    The changes in 8.1 are more needed for future acceptance (e.g. corporations upgrading within the next 2 - 4 years, which simply did not accept 8.0 as is). And as such certainly valid and urgently needed.

    For consumers at large, 8.1 is not different enough from 7 to be compelling. There is no big demand for touch enabled desktops and laptops, simply because they make no sense whatsoever. And the better hybrid devices out there do still not compete with tablets on battery life and price.

    I can install the latest Chrome or Firefox browser on any Windows 7 machine, and both run circles around IE.

    Users without high computing demands (the majority) can get a decent tablet that supports all social platforms, text processing, browsing and email and even light photo editing from $200 up. A decent Windows 8 laptop or hybrid is 3-4 times that price.

    Unless MS finds a way to be relevant in Post-PC devices, they can't get it right. All growth is where they are not.

  • Report this Comment On August 14, 2013, at 8:29 PM, marv08 wrote:


    "Has Apple sold 500,000,000 million of anything?"

    Apple has sold over 500 million iOS devices. Each of them for a lot more than $50.

  • Report this Comment On August 14, 2013, at 10:47 PM, JoeLemon wrote:

    A tablet is very limited in what it can do. Even web surfing is limiting. The limited memory and processing power limit it.

    The future is the hybrid computers. Full computers that are mobile then when you get home can hook them up to a monitor. Windows 8 is designed for the hybrid. It sucks as a desktop. Sucks as a tablet, but is awesome as a hybrid.

  • Report this Comment On August 14, 2013, at 11:15 PM, thethreestooges wrote:

    October 18 is bad news for MSFT. College students already got whatever they needed. And the top spot goes to Mac Air!

  • Report this Comment On August 14, 2013, at 11:43 PM, ThatTechNerd wrote:

    You're not seeing the big picture fool! Every article about Windows or Microsoft that I read by you only focuses on the now & Mr. Softy keeping his monopoly over real... Cough cough... x86 based OS's I mean... This is just not the case.

    Windows 8 era Microsoft is designed around never going away, & always having stability. To require a monopoly to survive or at least be relevant is a very hard task to hold onto, especially with as stiff competition as MS has. Therefore the best thing to do for a Microsoft that wants a stable business model is where you aim for a vision & you chase a monopolistic market share with it & if you miss the target you keep yourself in a top 5 situation at all times & you push that vision until it sticks (modern UI is the first step); & notice what their doing too, consoles? Xbox 360 is #3 in unit sales & #1 in profit, Xbox One is looking at #2 for next generation, & almost assuredly #1 for profits. Windows 8 is #1 in both market share & profits currently in x86-based OS's (which will SORE when they finally kill off XP). Windows Phone has a steadily growing lead over BlackBerry & it get money from both Apple & Google's mobile platforms now (royalties from Android, ad money from Bing being iOS's new favorite search engine). Cloud services? Since their partnership with Oracle they are definitely top 5. Tablets? In it's first generation Surface has reached the top 5 ranking. Windows RT as a standalone OS is the only product that they have a massive need for growth, but Windows 8 is designed for the future, their hardware is designed to bring about the future & inspire OEM's or compensate for the point their missing, & Microsoft only has growth in it's future from what I can see.

  • Report this Comment On August 15, 2013, at 12:48 AM, vantan wrote:

    An android tablet with a bluetooth keyboard is good enough for the things I do. No need for a Windows (or Mac OS) pc. Maybe don't even need the keyboard if the predictive touchscreen keypad works well (good enough when enabled in the app but some apps don't use it). As tablets get more cpu & memory horsepower, the needs of more users will be met and the tablet will become their pc. The pc is going the way of minicomputers and mainframes - only for a few specialized uses / users.

  • Report this Comment On August 15, 2013, at 3:09 PM, JoeLemon wrote:

    "The pc is going the way of minicomputers and mainframes - only for a few specialized uses / users."

    You mean like everything that is cloud based?

  • Report this Comment On August 16, 2013, at 2:44 PM, Phaedrus42 wrote:

    I would agree at this point that Microsoft does not have much in the tablet market but they're growing in the mobile market.

    Not sure where you're getting that Microsoft only has 4% of the mobile and tablet marked and it won't grown any time soon. Recently I've read that they're hitting 4% on the mobile phone market and that's a growth in the past year of close to 4% as they had less then 1% last year. So, they are growing in the mobile market.

    Windows 8 is primarily a touch interface setting Microsoft up for tablets and ultra-book touch devices. If they stayed with what they had then they'd never handle touch well and definitely just disappear like the dinosaurs. It's a transition operating system allowing you to run you're traditional applications alongside new touch applications. Over time more of the traditional applications will move to touch versions.

  • Report this Comment On August 16, 2013, at 6:18 PM, NoWindowsDriver wrote:

    I regret to say - but I think the Fools missed the point on this one...

    I totally agree with the That TechNerd's post.

    Microsoft is coming back like a freight train - strong as ever. And only a few people notice it for now.

    One needs to appreciate how much havoc the BYOD (Bring Your Own Device) brought to the corporate IT departments worldwide. Just because everyone needs a tablet and a phone to travel.

    And yet - none of the tablet's apps - neither Apple nor Android could provide any decent functionality to work with the Microsoft Office documents. But the companies - small and large run on Microsoft. And the Office.

    And what about ubiquitous Flash? None of the tablets run it. Only PCs and full Macs do.

    Enterprise-level security is still not there...

    These are BIG PAIN POINTS on the market.

    Over the last 12mo we have started to see Microsoft Surface Pro tablets, Lenovo Yogas and a handful others that are great full-power PCs in a tablet (or a better-that-tablet) format.

    And have you held in your hand the new Nokia's new Windows-based Lumia 1020 phone? This one is a beauty.

    My prediction is that The BYOD is coming to the end together with the Apple's tablets. Android will hold longer, but will succumb to those Full-PC-in-a-Tablet devices.

    Windows 8, while is having problems, has all the fundamentals right. It has a flawlessly running Microsoft Office, Acrobat, Flash. It has a great appeal to business users. Although not to consumers yet.

    This point not need to be missed. Apple always started from the consumer side and slowly migrated into the enterprise.

    Microsoft always started with enterprise and then - generated following with consumers.

    The train is coming. Be prepared...

  • Report this Comment On August 16, 2013, at 6:52 PM, cmalek wrote:

    MSFT has been basically range bound since 2001. The stock price has remained between $20 and $30 for most of that time with few foray up to $35 and one drop below $20. MSFT is great for trading but has little capital appreciation potential.

    MSFT is not, and never has been, an innovator. They have always been an imitator starting with MS-DOS. The company has become so unwieldy that even in imitating they have been falling further and further behind. MSFT has been chasing other companies for years. When Apple came out with a Graphic Interface, MSFT followed with Windows shortly thereafter. How many years after Apple came out with iPhone did MSFT introduce the Windows Phone? How many years after the iPad came out did MSFT release the Surface?

    So to answer the question, MSFT last chance to get it right came and went a long time ago. Before they have another chance to get it right, two things must happen: 1) a major change in corporate culture and, 2) a major change in management. Right now MSFT is like a super tanker that is plowing along under its own inertia. The stock is a good place to park your money because it will continue to bounce between $20 and $30 for years. You're not going lose a lot of money but you're not going to make a lot of money either.

  • Report this Comment On August 16, 2013, at 10:12 PM, Skiman1980 wrote:

    When the noobs get over it. Windows 8 will take off. Windows 8 is a pleasure to use, especially on a tablet and it can do a whole lot more than an ipad. After using windows 8, anything apple feels like the past. Its the future, when people get over this fear of something different, because its cool to do it or they just can't figure out a few basics. I noticed people are like this especially online article writers, they need to move on and just give it a try and not try to make it big online by making microsoft bashing articles

    These Microsoft hate articles on here go to far, and just prove the authors haven't actually use the products

  • Report this Comment On August 16, 2013, at 10:13 PM, Skiman1980 wrote:

    @cmalek you forgot about windows 95, which nearly put Apple out of business, nub

  • Report this Comment On August 16, 2013, at 10:45 PM, ldgpangeo wrote:

    "And yet - none of the tablet's apps - neither Apple nor Android could provide any decent functionality to work with the Microsoft Office documents. But the companies - small and large run on Microsoft. And the Office."

    That's less of a technical issue than the reality that MS controls the code to Office.

    Google Docs is rather well behaved on tablets because Google is committed to making it work on all devices, whereas MS uses Office to force users to remain in Windows. That type of "defensive" business logic is what will eventually kill MS.

    Google is, and will continue to be, a formidable competitor for both Apple and MS.

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