Microsoft Can't Win at the Expense of Apple and Google

Microsoft's (NASDAQ: MSFT  ) foray into tablets has been a disaster, but industry tracker IDC sees better days ahead for the software giant.

Microsoft's Surface line of tablets has been a disappointment since rolling out late last year, and hardware companies putting out tablets based on Microsoft's Windows RT or Windows 8 haven't fared any better. 

It hasn't helped that Windows RT and to a lesser extent Windows 8 lack the same developer support that Apple's (NASDAQ: AAPL  ) iOS and Google's (NASDAQ: GOOGL  ) Android are commanding. Windows 8 on tablets offers greater PC compatibility, but that also comes at the expense of hogging up precious storage space for entry-level models.

It also doesn't help that potential Windows hardware partners have little reason to abandon the freely available Android. It's there. It's working. 

But IDC does see Windows gaining ground in tablets in the coming years, and it naturally will come at the expense of iOS and Android. Let's take a look at IDC's market share forecast for the three leading platforms.

Operating System  2012 2013 2017
Android 52% 60.8% 58.8%
iOS 45.6% 35% 30.6%
Windows 0.9% 3.4% 10.2%

Source: IDC.

Making matters worse, IDC sees tablet growth slowing considerably in a few years as consumers gravitate to larger smartphones and phablets that make outright tablet purchases less compelling. Yielding market share in a growing pie isn't the end of the world, but fading in a pie that is itself expected to diminish is problematic. 

The good news for Apple and Google investors is that it doesn't have to play out that way. The tablet market could continue to expand, especially if tablets continue to gain at the expense of desktop and laptop computers. There's also little reason for Microsoft to succeed in tablets if Apple's iOS and Google's Android are living up to consumer and corporate expectations. That seems to be the case right now. Between Apple's iPad on the high end, and a growing fleet of Android tablets all across the pricing spectrum, it's hard to see how Microsoft plans to make itself viable at a time when the market's moving away from chunky operating systems.

IDC and fellow PC industry trackers underestimated the shift away from Windows-fueled PCs in recent years, and now IDC appears to be overestimating the role that Windows will play in the future of tablets.

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  • Report this Comment On December 05, 2013, at 8:13 PM, DanManners wrote:

    How does anyone know what will be?

    Apple is losing mktshare. But they can still be growing. They are getting and keeping the higher quality customer. Who spend much more.

    Same old story. Every week. Alot of people don't like big phones. Even if you have a big phone, you wont do all your work on it. How much better is it to read and browse the internet on with a laptop or tablet? Just stupidity. Both will sell and there will be new angles on it. No one can predict it.

  • Report this Comment On December 05, 2013, at 8:37 PM, emilykulish wrote:

    You are wrong on this. Microsoft indeed made 3 mistakes when they launched Surface RT.

    (1) The price was too expensively. It should have been priced at $399 incl. the touch cover.

    (2) It should launch full Windows 8 instead of RT;

    (3) It should launch a model with 7" or 8" screen.

    Now after more than 1 year, while it's a bit late, the three problems have all been solved. Today, if you look at tablets with 10" or larger screens, Windows 8 tablets are very close to Android tablets. Now, Microsoft just needs to launch more and more 7", 8" and 9" tablets (with its OEM partners) and lower the price further and further. If a full win8 tablet is selling at only $50 more than an Android tablet, more people will choose win8 tablets than Android tablets.

  • Report this Comment On December 05, 2013, at 9:31 PM, twolf2919 wrote:

    IDC keeps making these idiotic predictions, year after year - I wonder if anyone ever studied their accuracy? It almost seems like they're predicting whatever someone is paying them to predict.

  • Report this Comment On December 05, 2013, at 9:55 PM, jeek417 wrote:

    IDC is horrible at predictions. They predicted that the camera hardware business would only slow at a moderate pace in 2011. It has actually plummeted 30%-40% per year as a result of the smart phone growth.

    As far as tablets are concerned, my take is there is huge momentum for growth as they are incorporated into education from Kindergarten to universities. My 4 year old is as proficient on an iPad as most adults are. I'm positive she will need one for school in the near future.

    Also, there is huge opportunity on the enterprise side as PCs are replaced.

  • Report this Comment On December 05, 2013, at 11:49 PM, techy46 wrote:

    Nice try by IDC and Fools but I'll bet my Asus T100 that IDC is off by a factor of 2-3x. That's right Microsoft will take 10% of the tablet market or about 28m units in 2014, 15% or 43m units in 2015, 20% or 57m units in 2016 and 25% or 71m unit in 2017. Intel agrees with my numbers so it'll be Android 50%, iOS 25% and Windows 25%.

    Now who gets the 85% of PCs? That would also be Microsoft. So Microsoft sells 326m PCs vs 240 for Android and Apple.

    Nice try Fools. How's the 1b smartphones going to shake out in 2017?

  • Report this Comment On December 06, 2013, at 8:00 AM, symbolset wrote:

    "IDC and fellow PC industry trackers underestimated the shift away from Windows-fueled PCs in recent years, and now IDC appears to be overestimating the role that Windows will play in the future of tablets."

    Absolutely correct. IDC always errs on the side of optimism when it comes to one of their biggest customers, Microsoft.

    Great article!

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