Analysts, PC industry cool on Windows 8

Oct 17, 2012 by Peter Svensson
In this Monday, June 18, 2012, file photo, Microsoft CEO Steve Ballmer comments on the Windows 8 operating system. The PC industry is in a slump, as consumers show more interest in tablet computers and smartphones. Officially, PC makers say they expect Windows 8, which launches Oct. 26, 2012, to get buyers to open their wallets, but industry watchers and analysts are skeptical. (AP Photo/Damian Dovarganes, File)

While Microsoft is touting next week's launch of Windows 8 as the savior of the computer industry, PC makers and analysts are increasingly skeptical that the new operating system will lure consumers away from tablets and smartphones.

Even ., which makes the processors at the heart of 80 percent of personal computers, doubts that will have a big impact on sales. CEO Paul Otellini said this week that he's "very excited" about the new operating system but expects the usual holiday bounce in PC sales to be half of what it usually is. Clearly, PC makers are being cautious about building big stocks of Windows 8 PCs.

"We haven't had a chance to really judge how consumers will embrace this in the PC space or not," Otellini said on a conference call with reporters and analysts.

Research firm IHS expects the industry to ship 349 million PCs this year, down 1 percent from last year's all-time high. Although small, the decline would be the first since 2001.

In the U.S., a mature market where consumers are gobbling up tablets, PC sales have already been declining for two years.

Meanwhile, Apple has been doubling sales of iPad tablets every year since the first model was introduced in 2010. In the April to June period, Apple shipped 17 million , while Hewlett-Packard Co., then the world's largest maker of PCs, shipped 13.6 million PCs, according to Gartner analysts.

In this Wednesday, Feb. 29, 2012, file photo, Steven Sinofsky, president of Windows and Windows Live attends the Windows 8 Consumer Preview presentation during a press conference at the Mobile World Congress in Barcelona, Spain. The PC industry is in a slump, as consumers show more interest in tablet computers and smartphones. Officially, PC makers say they expect Windows 8, which launches Oct. 26, 2012, to get buyers to open their wallets, but industry watchers and analysts are skeptical. (AP Photo/Emilio Morenatti, File)

Smartphones, which were a before the 2007 launch of the , outsold PCs last year, even though PC sales were at a record high.

The PC market is still big, Microsoft CEO told the last month, "and Windows 8 will propel that volume."

The software is a response to the popularity of tablets. It tosses out many Windows conventions in favor of a radical new look that's designed to be easy to use on a touch screen. With Windows 8, PC makers are releasing a slew of laptops that double as tablets, either with detachable screens or with screens that fold down over the keyboard.

But Citigroup analyst Joe Yoo is even more pessimistic than Intel that Windows 8 will spur a turnaround in sales of desktop and laptop computers. It could turn out to be a "non-event" in terms of getting people to buy PCs, he said.

Microsoft did not immediately respond to a request for comment. On Thursday, the company reports results for the quarter that ended in September, and executives will likely talk about prospects for the rest of the year.

Brian White at Topeka Capital Markets said Taiwanese PC component suppliers aren't seeing any pickup in orders ahead of the Oct. 26 launch of Windows 8.

"The sentiment around Windows 8 was overwhelmingly negative," he said after meetings with suppliers. "We believe the PC industry is headed for a muted December quarter and well below the ramp expected with new products."

Analyst Mary Jo Foley at UBS is "leery" of Windows 8, noting that it has an entirely new look and feel. It could either be a big success, she said, or it could confuse customers and turn them off. She noted that Microsoft is set to support the launch with its $1 billion in advertising, the most it has ever spent on a campaign. That support will be critical for overcoming resistance to the new user interface and reinvigorate interest in PCs, she wrote.

PC makers began the year with the hope that a new wave of lightweight laptops called ultrabooks would provide a sales lift. But ultrabooks are still expensive, with most models around $1,000, and they haven't been compelling enough to overcome the growing popularity of smartphones and tablets.

Now, PC makers are in a tough spot when it comes to taking advantage of Windows 8, said Patrick Moorhead, a former chip executive who now runs research firm Moor Insight. Adding a touchscreen into a PC is expensive, and they're competing with tablets that are much cheaper. Meanwhile, Microsoft hasn't made much effort to add new features for mouse-and-keyboard PCs to Windows 8.

"If you're a user, you're asking yourself: 'Why do I need to buy this new notebook, if my old notebook can still do what I need it to do? Instead, I'll buy a new phone or a tablet,'" Moorhead said.

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User comments : 15

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3.7 / 5 (9) Oct 17, 2012
I can see developing a new interface for phones/pads, but attempting to force that interface on desktops/laptops its unlikely to succeed. If rejected on the desktop, it will likely fail as well on the phone/pad.

A split would seem to have been a better course.
2 / 5 (9) Oct 17, 2012
Who cares?
MS could disappear tomorrow I wouldn't miss it.
2.3 / 5 (3) Oct 18, 2012
All I notice is that my laptop runs four times hotter. So hot I must hibernate it while absent as a possible fire hazard. Malware attempts to break in with some winblows exploit every fortnight. Since it's used by the masses I will often try a new program such as hMailServer on winblows before finding a more comprehensive UNIX equivalent.
2 / 5 (1) Oct 18, 2012
I WAS very interested in the Surface Pro because it doesn't paint you in a corner like the RT version in terms of flexibility. But primarily this MS option was for no other reason than to make life easier when dealing with file formats from school (power point is a nightmare) and work(word and excel has a tons of elements that go wonky in libre office).

But of that kind of money forget it! Why does MS think it's a good idea to emulate Apple instead of Google? Too much focus on margin and not enough on profit. Penny rich pound poor, just like so many other protectionists and cronies of the world.
1 / 5 (4) Oct 18, 2012
Ever notice that old Steve Ballsmer in that adfoto for winblow$ looks a lot like 'Il Duce' Benito Mussolini the old Italian fascist dictator of the first great depression era? Fits as he has tried to dictate to the world concerning all things 'copywrong' for many years. May this latest incarnate abortion fall flat on its well deserved can. Linux Rules!
not rated yet Oct 18, 2012
Analyst Mary Jo Foley at UBS is "leery" of Windows 8, noting that it has an entirely new look and feel.

I never realized Mary Jo Foley was an analyst at UBS.
2 / 5 (1) Oct 18, 2012
so far most of PC users don't miss the Linux or BSD instead..
You're saying they wouldn't miss their Ipads and Iphones and Android smartphones and Internet which runs on *NIX?
2.5 / 5 (2) Oct 18, 2012
so far most of PC users don't miss the Linux or BSD instead..
You're saying they wouldn't miss their Ipads and Iphones and Android smartphones and Internet which runs on *NIX?

That's right. If you replaced the operating systems with Windows 8, most users would notice the change but wouldn't miss the old OS. Normal people don't get all emotional about such things.
2 / 5 (3) Oct 18, 2012
This release of the OS will be worse than Vista. You don't remove functionality and create frustration and hope that this will be entice people to use it. When it takes you five more clicks, ten more seconds for the same steps in an OS, you quickly realize the failure. Lets not talk about compatibility issues with software developers with the new architecture. There is a clear disconnect from power users and the main industry. this can be validated by the extreme reduction of price on the OS as Microsoft loses touch with their end users and market share.
5 / 5 (1) Oct 18, 2012
Windows 8 does seem like a mistake, you cannot design the same interface on a Desktop and a Tablet or Smartphone. On a tablet or smartphone, I want simple controls with big text and buttons, but on a Desktop or laptop I want a detailed screen with full customization options. Why? Because a desktop/laptop OS should be designed to capture your full attention and productivity. Mice are very accurate and fast, so I dont need giant obvious tiles, icons will work just fine. The point is, everyone asks themselves, "What can the new version of Windows do that the old version cant do?" If the answer for that person is "nothing", then why should they care?
3.5 / 5 (2) Oct 18, 2012
The problem with MS is that they make something, and everyone has to just deal with it and use it. What real option do they have? Linux is too fragmented (too many distros) and complicated. MacOS is fine but their computer cost twice as much. So we take what MS gives us because we are caught between a rock and a hard place, with no real option other than to suck it up and use what WORKS! I love what Android has done, in that it has made a Linux style system mainstream. Now if we can keep that momentum going and produce a Large Scale mainstream linux OS for desktops, we might can shake this monopoly and move forward. Basically, someone needs to sponsor linux on the desktop with some real money, just like Google did with Android.
1.3 / 5 (3) Oct 18, 2012
Lots of good points. Look at apple with their OS. Does an iPhone have the same interface as the desktop? No it does not. You cant have as much control with a fat finger on a touch screen as you do with a mouse. Plain and simple. Second,windows 8 has serious issues where they will try an limit the type of OS that can run on a PC, posted here on another article which linux users were not happy about. It also has application compatibility issues at the development level, this is huge for application portability and compatibility. All they had to do is leave the old start menu still available but what do end users know, big brother knows better. NOT!
1 / 5 (2) Oct 21, 2012
Linux is too fragmented (too many distros) and complicated. MacOS is fine but their computer cost twice as much.

I agree there are too many worthwhile distributions, but if users stick to the main ones instead of the derivatives then they are ok.
The whinging about Win8 is more symptomatic of Windows users in general. They do not like change or to learn something new which is why they would never contemplate using anything else (Linux or BSD), even if it is superior. Now MS is changing it's front end, Windows users are complaining about that too, because again, they don't like change and to learn something new.
It has to be remembered that MS users treat computers like any other household electrical appliance and that is the extent of their interest in computers. It's basically paint by numbers computing with very little brain input.
not rated yet Oct 21, 2012
because again, they don't like change and to learn something new
It's not just about change, but about effectiveness of work. If you need more clicks and drags for doing the very same action than before, then it's not about learning of something new. After all, the same criterion applies to Linux: if you need to go into command line, remember and write down something, it's just a mess. The problem with Linux is, it pushes the command line user interface of server configuration (CLI) to workstation environment (GUI) and now the Windows 8 does the same mistake and it pushes the user interface of tablet to the desktop environment. Each environment has its different requirements and the user interface should respect it.
1 / 5 (3) Oct 22, 2012
"I agree there are too many worthwhile distributions"

Correction, I was meant to say there aren't too many worthwhile distributions.

I'm sure Win8 allows you to change to a more familiar desktop environment. I must say, the new one does look like a dog's breakfast. Hardly something you would use on a desktop pc or a laptop for that matter.

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