Microsoft's Windows of opportunity?

Microsoft's revamped software and new tablet device are designed for computing on the go but will they have the apps to win over customers?

PUBLISHED : Saturday, 27 October, 2012, 12:00am
UPDATED : Saturday, 27 October, 2012, 3:25am

Microsoft introduced the biggest overhaul of its flagship Windows software in two decades, reflecting the rising stakes in its competition with Apple and Google for customers who are shunning personal computers and flocking to mobile devices.

"This is the biggest product we've ever done," chief executive Steve Ballmer said, comparing it with the PC's arrival in 1981 and the introduction of Windows 95.

Microsoft packed the new Windows with touch-screen capabilities, designed to vault the company into the tablet market dominated by Apple's iPad. To avoid being left behind as computing shifts to mobile devices like tablets and smartphones, the company radically altered Windows' familiar design and scrapped a strategy that had it relying entirely on partners to produce Windows computers.

"In creating Windows 8, we shunned the incremental," Windows president Steven Sinofsky said. Windows 8 and the company's first computer, the Surface tablet, went on sale yesterday.

More than 1,000 computers had been certified for Windows 8, Sinofsky said. That includes the first Windows machines capable of running on chips with technology from ARM, instead of Intel. Besides Microsoft's own Surface, the list of ARM-powered machines includes computers from Dell, Samsung Electronics, Lenovo and Asustek Computer. These run a version called Windows RT.

Still, Surface and the other Windows RT machines will be constrained in competition with Apple because they do not work with some of the most widely used downloadable applications. The RT-based machines can only run apps from Microsoft's new Windows store, which will not feature applications for Facebook or Apple's iTunes.

The Windows store does have some popular apps, including those from media-streaming companies. Still, Microsoft will not say how many apps are available, and the lack of a broad range of games, tools and other downloadable software will detract from the Surface in a head-to-head comparison with the iPad and its 275,000 apps.

"Part of me had hoped that we'd see more killer apps," Directions analyst Wes Miller said. "Consumers who buy into the platform - unless we start seeing an abundance of apps - are buying into a promissory note that the apps will arrive."

Machines with Windows 8 that run chips from Intel can run older Windows programmes.

Downloadable applications are central to the way customers use tablets, and one of Apple's selling points is its leadership in apps. Apple introduced a smaller, cheaper version of the iPad this week, part of chief executive Tim Cook's effort to keep budget-conscious shoppers from turning to inexpensive tablets sold by competitors such as Amazon. com.

The PC market will contract by 1.2 per cent to 348.7 million units this year, according to IHS ISuppli, the first annual decline since 2001. Microsoft is relying on the new operating system to revive interest in the PC and carve out a position for Windows in the tablet market, which is picking up consumers defecting from PCs.

Miller's examination of the Windows app store indicates there were 7,873 apps worldwide earlier this week, with hundreds added daily. Still, Facebook, for example, only writes apps for Apple's iOS and Google's Android operating system, and the company opted not to do Windows, a source said in May. Microsoft could have written a Facebook app on its own using Facebook's open standards, which is what the Windows Phone group did when similarly faced with a possible dearth of apps in 2010.

Instead, the Windows group focused on workshops to train developers and help them write apps, Antoine Leblond, the vice-president in charge of the Windows app store, said. More than 400,000 people had attended its developer camps, he said.

Besides Hulu and Netflix, the new Windows will also have apps such as the Skype internet-calling service and Evernote's note-taking tool. A version of Rovio Entertainment Oy's Angry Birds game will be available next month.

"When the store opens, we will have more apps in it than any other store when it opened, and to me that's a great sign of momentum," Leblond said. "I'm much more interested in the momentum … than what that absolute count looks like."