TechWeb

Windows 8 Sales Stall: 3 Strategies

Mar 11, 2013 (08:03 AM EDT)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=240150449


Windows 8 has been commercially available for more than four months, and though its progress has been analyzed and debated every step of the way, the touch-oriented OS remains a divisive topic, its prospects just as contestable today as they were in October.

Even Microsoft's partners don't agree. After unfavorably comparing Windows 8 devices to Chromebooks, Acer president Jim Wong has since reversed course, not only stating that Microsoft is providing more support for OEMs but also predicting that sales will pick up over the second half of the year. Samsung executive Jun Dong-soo evidently isn't so optimistic, having reportedly compared Redmond's newest effort to the much-maligned Windows Vista.

Samsung is arguably less invested than Acer in Windows 8's future, and one can argue whether such industry chatter is meaningful. Nonetheless, Windows 8 sales failed to impress over the holidays and have subsequently shown signs of diminishing momentum.

It's still early in the game, but Redmond won't see much of a boost from the enterprise until at least 2014, as most companies are still too invested in Windows 7 to deal with a new OS, let alone budget for the new hardware necessary to maximize the upgrade. Consumer enthusiasm has thus become central to Windows 8 forecasts; these buyers not only dictate near-term progress but also, due to BYOD, inform how large eventual Windows 8 deployments will be.

The broad strokes of Microsoft's strategy are slowly becoming discernible, and though success is not assured, the software giant has cause to be optimistic. Here are three steps Redmond appears to be taking to boost Windows 8.

Inspire the OEMs.

Windows 8 has been a point of contention between Microsoft and many of its partners. Some, such as Dell, have unambiguously praised the OS's tactile experience. But several have implied weak confidence in Windows 8's future, investing in Chromebooks and Android-based tablets as an ostensible hedge against the OS's uncertain potential. Some OEMs also reportedly took umbrage when Microsoft's Surface line began encroaching on their territory.

[ Are you puzzled by the plethora of hardware devices when it comes to Windows 8? Read Windows 8 Device Choices Baffle Buyers. ]

According to recent reports, Redmond is aggressively working to make Windows 8 more appealing to its partners. The Wall Street Journal, citing unnamed sources, claimed on March 5 that Microsoft is charging OEMs only $30 for Windows 8 bundled with Office 2013. The WSJ claimed this package previously cost $120. Taiwanese tech site DigiTimes received slightly different news; citing Asian vendors and ODMs, it reported that Windows 8 licenses had been slashed from around $90 to just $20. The site also claimed that discounts are limited to devices with 11.6-inch and smaller displays, and that free copies of Office are being added only for sub-10.8-inch models.

Many have attributed Windows 8's disappointing holiday sales to a lack of touch-oriented models, and to the fact that these few options were too expensive. By incentivizing OEMs to build smaller, less expensive form factors, Microsoft addresses both concerns. Redmond hasn't confirmed the discounts, and even if the reports are true, it's unclear if customers are warming to the Windows 8 user experience. But if price points are truly stifling consumer adoption, OEM discounts make sense. While the move runs the risk of looking desperate, it encourages Microsoft partners to produce innovative form factors tailored to the OS's hybrid identity as both tablet and computer.

Make the Most of Intel's Haswell Chips.

Ultrabooks that run on Intel's Haswell chips should hit the market by the end of the year. The next-gen Core processers advertise slight increases in central processing power but substantially improved graphics performance and power consumption. Intel has mandated that all future Ultrabooks be touch-enabled and suggested that the chips will advance its perceptual computing concept, which integrates features such as gesture and voice controls into the PC experience.

The company has also set a price target of $599 for Haswell-based models. Taken together, these developments suggest that if Microsoft's discounts don't inspire OEMs' respective imaginations, Intel's newest silicon might do the trick.




Forbes has suggested Haswell could offer a superior performance and stimulate PC sales. DigiTimes, citing supply-chain sources, expects the chips to contribute to eye-popping growth for several struggling PC makers, including a 30% increase in PC shipments for HP and a 19% increase for Dell.

Such forecasts are somewhat audacious, given that IDC expects PC sales to be down this year, and a rumor that Haswell will ship with USB 3.0 problems doesn't inspire confidence. But if Haswell empowers OEMs to produce affordable and compelling new devices, Windows 8's outlook could be much brighter by early 2014.

Offer Compelling Use Cases.

To some users, Windows 8's appeal is obvious: it offers both tablet and laptop in a single ultraportable package. Based on sales, though, this duality hasn't been particularly persuasive. Much of the disenchantment can be attributed to user experience frustrations. Some apps behave differently in the touch-oriented Metro interface than they do in the traditional Explorer interface, for example. The apps themselves have also failed to inspire killer use cases. As Michael Cherry of Directions on Microsoft recently told InformationWeek, "Nobody can tell us an app for Windows 8 that they just have to have."

Indeed, whereas Apple's iPad ads emphasize the variety of experiences its apps enable, Microsoft's Surface spots, though dynamic, communicate the Windows 8 experience largely through interpretive dance. To those for whom the OS's capabilities are not self-evident, Redmond has not provided clear guidance.

Though steadfast in her assertion that Windows 8 has kept pace with its well-received predecessor, Windows CMO/CFO Tami Reller has acknowledged that Microsoft's pre-installed Metro apps need work. Windows Blue is expected to provide a number of enhancements this summer, including a new version of Internet Explorer 10 and improved search functions. But recent rumors suggest Redmond might refresh its base apps even sooner, perhaps within the month.

If Microsoft can deliver a superlative experience, the company would set an inspiring example for developers. Programmers have expressed frustration about writing for Windows 8 since before the OS launched. Support systems have slowly come online, but only about 46,000 Windows 8 apps have been submitted, far fewer than the 100,000 forecast by at least one Microsoft executive in October. There's also evidence that developer activity has dropped off.

Microsoft has the resources and ingenuity to create imaginative and compelling user experiences, as SketchInsight, its recently revealed predictive whiteboard attests. These qualities aren't yet as evident in Windows 8, but if Microsoft can conjure a few first-rate applications, the remaining pieces could start to fall into place.

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