Will Windows 8 save Christmas?
PC shipments slogged along during 2011 and will continue to do so this year. IDC says growth was a paltry 1.8 percent last year and will be a tepid 5 percent in 2012 -- tepid considering the year-over-year comparison is weak. Bob O'Donnell, IDC's veep of Clients and Displays at IDC cites the oh-so obvious reason: "Many consumers are holding off making PC purchases at the moment because tablet devices like Apple's iPad are proving to be a powerful distraction".
But he qualifies: "End user surveys tell us that few people consider media tablets as replacements for their PCs, so later this year when there is a new Microsoft operating system, available in sleek new PC form factors, we believe consumer interest in PCs will begin to rebound". Do you believe him? Pardon my skepticism. I don't.
That "distraction" amounts to 3 million iPads sold over the launch weekend, which includes Friday March 16. If a shiny new tablet and an existing PC are replacement enough for a new computer, then IDC's forecast is built on sand. That's the scenario I expect to unfold -- at least in so-called mature markets. Perhaps IDC analysts think so, too, since today's forecast offers something new: Breakdown of projected laptop and desktop shipments by mature and emerging markets.
IDC, like Gartner last week, assumes that Ultrabooks and Windows 8 will lift PC sales in the second half and that's where most of the year's growth will occur. However, both firms' computer shipment predictions came in below forecasts for every quarter of 2011, and the year; that's reason enough to question even 5 percent growth -- 4.4 percent, according to Gartner.
Jay Chou, IDC senior research analyst, concedes that "2012 and 2013 will bring significant challenges for Microsoft and the PC community. Windows 8 and Ultrabooks are a definitive step in the right direction to recapturing the relevance of the PC, but its promise of meshing a tablet experience in a PC body will likely entail a period of trial and error, thus the market will likely see modest growth in the near term".
Meanwhile, iPad will Pac-Man across the computing landscape gobbling up would-be PC buyers long before the first Windows 8 slate ships or manufacturers release compelling, and, more importantly, affordable designs.
No one doubts Windows 8 will ship this year. How can you miss Christmas? Microsoft did with Windows Vista and can't afford to put another lump of coal in partners' and customers' holiday stockings. Today, citing unnamed sources, Bloomberg reports that Windows 8 will be complete in summer and launch in October.
D`oh, of course it will. Early last month, I laid out the same timetable -- summer release to manufacturing and October launch. It's the only sensible one based on past Microsoft OS development milestones and Windows 8 Consumer Preview's release.
What is uncertain: Impact. How much will Windows 8 have on holiday PC sales and shipments during 2013 and 2014? Much hinges on Windows 8 slates, particularly considering how much better the new Metro UI is optimized for touch rather than mouse and keyboard.
"The real question is whether Windows 8 and ultrabooks will create the compelling offering that gets the earlier adopter of devices excited about PCs again", Ranjit Atwal, Gartner research director, says.
By the way, Gartner predicts that the cloud will replace the PC as digital home and work lifestyle hub by 2014.
Enterprise or Bust!
Not surprisingly, Microsoft expects success. "When you think about the hundreds of millions of units that we're going to sell in just that first year, it is an awesome thing that we're getting very, very excited about", Kevin Turner, Microsoft COO, says -- yesterday during the company's annual Convergence event in Houston.
Microsoft will take no chances and looks to cash in on Windows 8, regardless of how it affects PC shipments. The company is aligning supporting products, many aimed at the enterprise, for fourth quarter release. For example, yesterday, Microsoft affirmed Q4 release of Dynamics AX 2012 R2, Dynamics NAV 2013 and Dynamics GP 2013. Not surprisingly, Windows 8 Server is following similar release track. Perhaps even Office 15, if Windows on ARM devices release for Christmas with the productivity suite pre-installed.
Windows 8 is "enterprise-ready and consumer friendly", Turner says, calling it "an operating system without compromise". Previously, Microsoft separated key security and networking features from consumer and business versions. That's changing, somewhat.
"No longer are you going to have to make compromises as an operating system", he says. "Today a lot of companies have to decide, do I want end user flexibility, or do I want great security and management. Do, I want touch, or do I want the ability to have a traditional mouse and keyboard. Guess what, with Windows 8 we're taking the 'or' out, and we're basically inserting the word 'and'. You can have a great touch experience and with one click you can go right back to the desktop that you've come to know and love".
Consumerization of IT is reason enough to provide essential security and management capabilities across different Windows versions. But there is another: The competitive threat iPad and, eventually, Android tablets pose. These devices don't have to replace a PC, just adequately extend the lifespan of an older one -- and, yes, in the enterprise, too. Microsoft needs to ensure that Windows 8 slates appeal to businesses, the company's core market, as much as possible.
Some enterprises already are turning away. Bolstering a January IDG Connect Study, ChangeWave finds that one in five businesses will buy a tablet next quarter, with the majority overwhelmingly planning on iPad. That's 84 percent, up from 77 percent in November. Meanwhile, interest in all competing tablets declined.
"Fully 51 percent of IT and business decision-makers say they always use their iPad at work", according to the IDG Connect Study -- and, of course, that's the number who actually own the tablet. Sixteen percent have replaced their laptop with an iPad and 54 percent supplement it.
Qualification: The firms conducted these studies before Apple announced the new iPad.
Personally, I like Windows 8. I'm hopeful the operating system will reinvigorate relevance into the Windows PC. But Microsoft and OEMs can't ship soon enough. Can Windows 8 save Christmas for Microsoft and its partners? I answer "No" for holiday 2012. Perhaps "Yes" for holiday 2013. What do you say?
Photo Credit: Joe Wilcox