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Microsoft answers Windows device share slump with freemium strategy

Gregg Keizer | March 23, 2015
In 2015, Windows' share of the operating systems on all devices — smartphones, tablets, PCs, ultra-light form factors and PC-tablet hybrids — will slip to 13.3%, down from 13.6% last year and off from a 14% share in 2013, Gartner said.

Microsoft's strategic shift to creating apps and services for rival operating systems was born from the hard realization that Windows' share of the total device market was in the middle of a three-year slump, according to new forecasts Thursday by research firm Gartner.

Not until 2017 will Windows' share return to 2013 levels, Gartner said.

In 2015, Windows' share of the operating systems on all devices — smartphones, tablets, PCs, ultra-light form factors and PC-tablet hybrids — will slip to 13.3%, down from 13.6% last year and off from a 14% share in 2013, Gartner said in revised estimates provided to Computerworld.

Windows' 2015 share of 13.3% was based on the predicted shipment of 330.5 million Windows-powered devices, which if accurate, would represent a year-over-year increase of less than 1%.

For 2016, Gartner projected Windows' share to climb to 13.8% on the back of 358.3 million devices. Not until 2017, when Windows' share reaches 14.4%, will the OS top 2013's 14%.

That 14% benchmark had some significance to Microsoft last year, although the company has not mentioned it since.

In July 2014, Kevin Turner, Microsoft's chief operating officer, acknowledged the reality his company faced, pointing out that its operating systems powered a small fraction of all devices worldwide. Even so, he argued that Microsoft was making moves that would boost its share. "We want to go from 14% [device share] to 18%, from 18% to 25%, from 25% to 30%. That's the beauty of this model ... [the opportunity] is much bigger than anything we've had in the past."

If Gartner's latest forecast is anywhere close to correct, Microsoft will instead struggle to hold onto the device share it owned two years ago, and will have virtually no mid-term shot at turning it into even the lowest number Turner set as an interim goal.

Microsoft's problems have been well documented. Traditional PC shipments will continue to decline: Gartner forecast drops in shipments of 9% this year, 4% in 2015 and 3% in 2017. All the growth in what could generously be called "PCs" will be in what the research firm calls "ultramobile premium" systems — top-priced lightweight laptops and premium 2-in-1s like Microsoft's Surface Pro — which will post increases of 46% in 2015, 39% in 2015 and 23% in 2017. But even with their addition, gains for the broader PC category will only start in 2016, and then amount to just 4%.

Windows also has flailed at smartphones and made only small inroads into the suddenly-slow-growth tablet market.

Only Microsoft knows its own projections — and it obviously won't share those outside the company — but if they are in the same range as Gartner's, the company had to see the writing on the wall.

 

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