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Newest forecast kicks Windows' rebound further down the road

Gregg Keizer | Oct. 24, 2013
Lousy PC sales, Microsoft's refusal to complete in small-tablet market contribute to another downgrade of Windows device estimates

Smart device shipment share 2012-2014
Microsoft's share of all computing devices -- personal computers, tablets and smartphones -- has stagnated even as Apple's and Google's are expected to climb once again in 2014. (Data: Gartner.)

"Consumers are not prepared to spend that kind of money [for Microsoft's Surface tablets]," Milanesi said, pointing to the higher-priced Surface Pro 2, which starts at $899. Microsoft's other tablet, the Surface 2, nee Surface RT, was a disaster this year, with sales so sluggish that the company had to eat a $900 million write-off in July.

The Redmond, Wash. firm has been hampered by its stubborn Surface strategy, which emphasizes the devices as 2-in-1s able to serve both tablet and notebook masters. Milanesi was leery of the pitch, not because the new Surface tablets failed as hardware, but because customers haven't decided that it's smart to own one expensive device rather than tote around a pair of cheaper alternatives.

"The ultramobile and hybrid category will capture a lot of interest and advertising, but not much money," said Milanesi. "The holiday season will be all about smaller tablets."

Even smartphones, where Microsoft will play as an OEM for the first time early next year -- assuming it wraps up its acquisition of the handset portion of Finland's Nokia -- won't be as big in the fourth quarter as they have in past years. "Smartphones will very obviously not be at the top of Santa's list this year; cheaper tablets will," said Milanesi.

Gartner isn't alone in its continued pessimism about Windows' recovery; Rival researcher IDC's forecast for the third quarter pegged the PC downturn at 7.6% year-over-year, the sixth-consecutive quarter that shipments shrunk. Sales to consumers plunged again, with business purchases making up some, but not all of the slack.

For 2013, Gartner predicted that Windows devices will account for 14.3% of the 2.3 billion total; that share will rise slightly to 14.6% in 2014. Meanwhile, rival Apple will narrow the gap, ending with a 11.7% share this year but with an expected 13.6% share next year, all on the back of smartphones and tablets.

Both will be dwarfed by Google's Android, which will power 38% of all smart devices in 2013, and 45% in 2014.

Gartner and others, notably IDC, have repeatedly had to revise their projections as the numbers worsened through 2013. Each time they have predicted that the PC business -- and thus Windows' fortunes -- will turn around at some later date, whether the next quarter or the next half of a year, they've had to push that timetable further into the future.


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