Microsoft seeks to catch up in tablet market with Windows 8

Consumers and enterprises will have the last word on whether the new OS is a success

Windows 8 is finally here and the stakes are sky high for Microsoft.

"We're so happy to be here today and to celebrate the global availability of a new era of Windows and Windows-powered PCs," said Steven Sinofsky, president of Microsoft's Windows and Windows Live Division, at the launch event in New York. "There is so much excitement and potential for the future of computing to improve how we work, learn and entertain. Windows 8 is a major milestone in the evolution and revolution of computing."

With Windows 7 and prior versions of the OS used by more than 1 billion people, Windows 8 begins a new era of computing "for the next billion people" in a market changed by the rise of tablets and mobility, he said. Microsoft has reimagined the OS for this new reality, he added.

"The clunky desktop PC has been replaced by more sleek, more powerful, more mobile PCs with vastly more storage and computing [power] at a fraction of the price," he said.

So far, more than 1,000 tablets and PCs featuring a wide variety of screen sizes, configurations, form factors and designs have been certified for Windows 8, he said. "Fully capable" Windows 8 PCs will be available for under US$300, he said.

Sinofsky also announced the availability of Windows 8 upgrade offers in retail stores and online, as well as the official launch of the online Windows Store, where customers can find new Windows 8 applications built with the new Windows runtime WinRT APIs and tools.

Once the supreme leader of personal computing, Microsoft faces a brave new world in which PCs are losing territory to tablets and smartphones, in which Windows has a minor presence.

Since Windows 7 came out in 2009, the world has caught tablet fever. So, Microsoft designed Windows 8 primarily to help the company make a run at the tablet market. Windows Phone 8, expected to be launched next week, is supposed to do likewise in the smartphone market.

Windows is still the dominant PC OS, but PC sales have shrunk. In the third quarter, worldwide unit shipments dropped 8.6 percent year-on-year, a "severe slump" due in part to "pressure" from tablets and smartphones, according to IDC.

Meanwhile, tablets are flying off the shelves. Gartner forecasts worldwide media tablet sales to end users to total 119 million units in 2012, up 98 percent compared with 2011. Gartner expects Apple's iOS to continue its dominance with a projected share of over 61 percent. Windows is expected to ship in only 4.8 million tablets this year.

Making Microsoft's position worse is the BYOD (bring your own device) trend, in which millions of people worldwide now use their personal smartphones and tablets at work. Android phones, iPads and iPhones have invaded workplaces while Microsoft hasn't been able to counterpunch.

In a recent study, Forrester Research predicted that by 2016, Windows will remain the leader in desktop and laptop OSes, be a contender in tablets with about 27 percent of unit sales and trail Android and iOS in the smartphone market with only 14 percent of units.

At least publicly, Microsoft has expressed complete confidence that Windows 8 will succeed. It has spent more than a year trying to create excitement around the product among developers, OEMs, ISVs, consumers and enterprises.

However, key questions remain.

The new tile-based Windows user interface, formerly called Metro, is a radical redesign meant to optimize the OS for tablets with touchscreens and stylus pens. Windows 8 is also designed to work on desktops and laptops using keyboards and mice.

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