Microsoft woos mobile users, aims at Apple

Oct 26, 2012 by Rob Lever
A screen displays the logo of Microsoft's Windows 8 operating system at a press conference for its launch on October 25 in New York City. The company kicked off sales of the system and its Surface tablet Friday amid mixed reviews as the tech giant ramped up efforts to compete in a market shifting rapidly from PCs to mobile devices.

Microsoft kicked off sales of its revamped Windows 8 system and Surface tablet Friday amid mixed reviews as the tech giant ramped up efforts to compete in a market shifting rapidly from PCs to mobile devices.

Analysts said Microsoft, which unveiled its new efforts Thursday, is trying to walk a fine line by keeping hundreds of millions of users worldwide while accelerating efforts to compete in the mobile world dominated by Apple and .

Windows 8 represents a compromise by Microsoft—with new featured added for while supporting the vast number of older Windows devices.

Some consumers may embrace the change, but businesses may move more slowly to adopt the new operating system, which is based on "tiles" on the computer screen.

"There is a learning curve but it's relatively small," said Michael Gartenberg, analyst with the research firm Gartner.

"Microsoft's challenge now will be to educate the market why different is also better and then teach them how the changes work. Consumers have learned to use mice, trackpads and touchscreens so they are clearly open to trying new things. Businesses will likely adopt through phased migrations over time, much as they've done in the past."

Kash Rangan, analyst at Bank of America/Merrill Lynch, noted that Windows 8 "has received mixed reviews from the press but we believe it creates an important opportunity for Microsoft to tap the as PC growth moderates."

Frank Gillett at Forrester Research said that while Microsoft is used on some 95 percent of PCs, the company has only about a 30 percent share of "personal devices" which include PCs, smartphones, and tablets.

"Windows 8 is a make or break product launch for Microsoft," Gillett said.

Panos Panay, the general manager of Microsoft Surface, holds up the tablet during a press conference in New York on October 25. Microsoft kicked off sales of its revamped Windows 8 system and the tablet Friday amid mixed reviews as the tech giant ramped up efforts to compete in a market shifting rapidly from PCs to mobile devices.

"Windows will endure a slow start as traditional PC users delay upgrades, while those eager for Windows tablets jump in. After a slow start in 2013, Windows 8 will take hold in 2014, keeping Microsoft relevant and the master of the PC market, but simply a contender in tablets, and a distant third in smartphones."

Others said the dramatic change in look and feel might not be initially welcomed.

"Windows 8 looks like a big, bold, very innovative and very different new operating system," said independent tech analyst Jeff Kagan.

"The problem is that Microsoft is not giving users the chance to get used to the new slowly. Instead they are launching this in an all-or-nothing way."

Surface, which seeks to challenge Apple's market-ruling iPads and rivals built on Google's Android software, appeared to get off to a good start. On Microsoft's website, orders were being taken for shipment "within three weeks," suggesting strong demand.

"It's really a new class of device that sees the tablet and PC experiences merging into a single device instead of discrete ones," Gartenberg said.

"It's a different approach and a lot will depend on consumers who try the device hands on and see if it works for them."

Surface—a late entry in the market—has a 10.6-inch (26.9 centimeter) screen and starts at $499, challenging the larger-format iPads.

But Surface appears to be a cross between a tablet and a PC, equipped with a flip-out rear "kickstand" to prop it up like a picture frame and a cover that, when opened, acts as a keypad to switch into "desktop" mode for work tasks.

Rangan said Surface "feels perfectly sized for watching movies, reading books/magazines or for productivity tasks."

"While it's an expensive accessory, it is a very good add-on in our opinion as it functions well and brings the tablet closer to being a laptop replacement."

A review on the technology blog Cnet was less enthusiastic, saying Surface "feels strong and well-built" but offers "sluggish performance" and that the Windows Store for apps "is a ghost town."

But Douglas McIntyre of the financial website 24/7 Wall Street said Microsoft appears to be moving forward.

"For just a moment, Microsoft may have emerged from Apple's shadow," he said.

"Windows could surprise the market if its new design and normal Windows upgrades help drive robust sales. And expectations for Windows Mobile are so modest that Microsoft may well top them."

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