Microsoft's 'big opportunity' to goose device share stalls before it gets started

Microsoft's 'big opportunity' to goose device share stalls before it gets started

Microsoft's push to move its device needle from 14% just got harder.

Microsoft's job of moving its device needle from 14 per cent, which its COO said this summer represents "a much bigger opportunity than we've ever had in the past," just got harder. Gartner has forecast that the company's share will be flat this year and climb only slightly in 2015.

For 2014, Windows' share of the operating systems on all devices -- smartphones, tablets, PCs, ultra-light form factors and PC-tablet hybrids -- will remain at 14 per cent, the same as last year, Gartner said in new estimates just released.

Windows' share is stuck at 14 per cent even though the number of devices shipped with a Microsoft OS will increase by 3.2 per cent from 325.8 million last year to 336.1 million this year.

For 2015, Gartner projected Windows' share to climb to 14.6 per cent on the back of 370.9 million devices shipped, a year-over-year increase of over 10 per cent. Today's numbers were the third set released by Gartner this year.

"Windows shows very gradual growth and that's no surprise actually," said Gartner's Mika Kitagawa in an interview.

The lack of movement in Windows' share and the small increase in 2015 threatens to derail Microsoft's plan to improve its position by convincing customers to adopt the OS on smartphones and tablets, and boost the sales of other form factors that run the operating system, such as hybrids and traditional PCs.

In July, Kevin Turner, Microsoft's chief operating officer, acknowledged the reality his company faces, pointing out that its operating systems power a small fraction of all devices worldwide.

But Turner, the czar of Microsoft's sales, remained bullish in a make-lemonade-from-lemons speech at his company's Worldwide Partner Conference (WPC). "We have a much bigger opportunity than we've ever had in the past to grow our mutual businesses, but we have to rethink how we look at our businesses," he said.

Microsoft has historically measured success, Turner said, by its ability to sell Windows licenses to computer OEMs (original equipment manufacturers). But even though it still does that, and successfully -- Windows ends up on more than 90 per cent of all new personal computers, Turner said - things have changed.

Arguing that Microsoft had to "think like a disruptor," Turner acknowledged that the company was in a hole, but said it was making moves that would help it climb out. "We are making progress on this transformation. In fact, we're making really, really good progress," he argued. "We want to go from 14 per cent [device share] to 18 per cent, from 18 per cent to 25 per cent, from 25 per cent to 30 per cent. That's the beauty of this model ... [the opportunity] is much bigger than anything we've had in the past."

Gartner's forecast pushes out that timetable, given that Windows next year will be far from even Turner's first step to 18%.

The problems Microsoft faces remain the same. Traditional PC shipments will continue to decline; Gartner forecast a drop in shipments of 7 per cent this year and 6 per cent in 2015. All the growth in what could generously be called "PCs" is in what the research company calls "ultramobile premium" systems -- top-priced lightweight laptops and premium 2-in-1s like Microsoft's Surface Pro -- which will post increases of 75 per cent in 2014 and 71 per cent in 2015. But Windows does not account for all those devices.

And Windows has flailed at smartphones and made only small inroads into the tablet market.

Windows wasn't the only platform Gartner said would grow slower than it believed in July, when it last issued a forecast: Apple's iOS and OS X combined number was also downgraded.

For 2014 and 2015, Gartner now forecasts that iOS/OS X will power 263 million devices this year, down from the 271.1 million it estimated in July, and 295.2 million in 2015, off from the earlier 301.3 million estimate. Those figures would result in year-over-year growth rates of 11.4 per cent and 12.2 per cent, respectively.

Android will take up the slack, said Gartner, which predicted Google's mobile operating system will become even more pervasive, with shares that in the political world would represent landslides.

Where three months ago Gartner projected that Android device shipments would grow by 30 per cent and 17.3 per cent in 2014 and 2015, today it modified those estimates to 38.1 per cent and 17.2 per cent, respectively. Gartner has now pegged total Android device shipments for 2014 and 2015 at 1.24 billion and 1.46 billion, up from previous bets of 1.17 billion and 1.37 billion, enough to account for 51.5 per cent (2014) and 57.4 per cent (2015) of all devices.

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Tags MicrosoftGartnerhardware systemsWindows PCs

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