Microsoft's bet on touch PCs fails to pay off
Touch's premium continues to scare off buyers who have been trained by years of cut-rate PC deals, but the prices themselves are not entirely to blame. Even if the gap between touch and non-touch PCs was significantly smaller, customers would still pass because they don't see much value in having touch on a PC.
"Touch is just not that compelling for most. There are not that many touch-required apps that people feel they must have," said O'Donnell.
That argument has been hammered home by analysts since before Windows 8's launch: Microsoft's ecosystem has not produced enough high-quality, have-to-have apps to spur sales of tablets or convince traditional PC buyers to abandon the mouse-and-keyboard Windows interface and its legacy applications.
Minus compelling touch apps, people don't see the point of spending more for a feature they don't plan to use, O'Donnell said.
And Microsoft may have a touch problem for a long time if analyst Patrick Moorhead was right last week. Unless Windows 8's catalog is quickly fleshed out to include most of the top-100 apps -- one study said the OS had just 54% of that list covered -- it will be plagued with an app-gap reputation for years, Moorhead said.
So what's Microsoft to do?
O'Donnell suggested Microsoft recognize that it's not going to sell Windows 8 -- and help its hardware partners sell notebooks running the OS -- by pushing touch.
"The big challenge Microsoft faces is doing whatever it can to make Windows 8 work in a non-touch environment," O'Donnell said. "Ninety percent of the PCs sold this year are not going to have touch."
Microsoft has made some moves in that direction with Windows 8.1, slated to ship this fall. Windows 8.1 will offer users the option of booting directly to the traditional desktop, avoiding the touch-first Start screen, and will restore a Start button-like control to the desktop. Both were replies to long-running criticism that the company was forcing a touch-centric user interface (UI) down customers' throats.
"They did make some changes, like the Start button, but they should have gone farther," said O'Donnell. "They should have restored the Start menu, too."
In Windows 8.1's preview, which shipped in late June, the Start button takes users to the touch- and tile-based Start screen for launching applications; a return of the Start menu, where programs would be listed for launching, would let people avoid the Start screen almost entirely.
The touch disconnect between Windows 8 and the PC industry may be part of the reason why long-time Microsoft partners are increasingly nervous about the future.
Last week, Acer -- the Taiwanese computer maker that in May predicted touch notebooks would make up a third of its inventory -- voiced the strongest anti-Windows 8 statement yet by an OEM.
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