When worldwide shipments of desktops and laptops slid by their largest margin in a decade earlier this month, Microsoft caught much of the blame over its radical new Windows 8 operating system, launched late last year, and its lack of a single, familiar button. Microsoft may now be hoping that reviving the “start” button could restart sales of PCs.
In the Windows 8.1 update, the company is rumoured to be considering an option to let users boot to the old layout, with its onscreen start button, and bypass the new app-heavy layout that makes computers look more like tablets or smartphones. Windows 8 is designed for touchscreens, clearly the future of computing. But Microsoft appears to be ahead of its time: fewer than 15 per cent of computers on the market this year will be touch-enabled, according to David Daoud, an analyst at IDC, the research firm that reported PC shipments in the first quarter of 2013 were down 14 per cent from the year before. Analysts pointed to a wave of bad reviews of Windows 8 to explain the drop (90 per cent of the world’s computers use Windows). One tech columnist even declared, “Windows: it’s over.”
Growing tablet sales have also been blamed for the PC’s decline, but most analysts agree that tablet users still want, and need, a computer. That’s good news for Microsoft, which accounted for a measly 1.5 per cent of global tablet sales last year, according to ABI analyst Jeff Orr. PC demand is also strong in developing markets: computer maker Dell, for instance, recently announced plans for a massive expansion of stores in Chinese cities.
But if the heyday of PCs really is over—a view supported by last week’s news that PC microprocessor maker Intel expects an eight per cent drop in second-quarter revenue—analysts note Microsoft’s business extends beyond Windows, including cloud-computing and its Office suite. Last week, a Morgan Stanley analyst called the company’s stock (up 7.5 per cent this year) undervalued and a bargain. Whether or not Windows 8 can be salvaged with a start button, Microsoft is far from finished.