Seriously. I mean, they’re the largest software company in the world, their operating system still runs the majority of the world’s personal computers, but every time they’re in the news lately, it’s an embarrassment. Let’s start the list.
Zune. The iPod killer. The machine that was going to walk into the digital audio market and show that, once again, there was nothing Apple could possess that Microsoft could not take away.
Today, Bloomberg is reporting a rumor that Microsoft will stop making new versions of the Zune, citing “tepid demand” (that translates to 2% market share in 2009, according to NPD).
Fortunately, this is the end (allegedly) of the Zune hardware, but the Zune software could still be part of the Windows Phone, right? Which brings us to…
Windows Phone 7
Windows Phone 7 was a radically new idea for the smartphone: instead of having your head buried in an app, it was going to let you get in and out of your phone quickly so you could enjoy real life.
Turns out smartphone users like their phones better than the real world. According to eWeek, Microsoft’s market share for phones actually fell in the last quarter, down 1.7% to 8%. And they still won’t announce how many phones have actually been sold to customers, rather than shipped to retailers.
And then there’s the issue of a lack up updates for Windows Phone 7. While Apple releases periodic updates to iOS that fixes bugs and adds new features (like AirPlay and AirPrint), Microsoft has pulled an update because it created problems with Samsung phones.
Now, granted, Nokia has decided to make Windows Phone their main smartphone software (hardly surprising, considering their new CEO is a former MS executive). But when will this happen? Nokia estimates the transition could take two years.
Speaking of two years…
Microsoft 7 may be superior to Vista, but it wasn’t designed for tablets (I know, I tried it). But, I’m not a Microsoft user. Surely there must be those who are excited about the idea of using the exact same software on their slate as on their desktop, right?
I don’t know. I can’t find any data about Microsoft’s share of the tablet market. The closest I could come was this article stating that Android didn’t have as big a share as everyone thought. Microsoft isn’t even mentioned as a competitor, or, if it is, it’s all speculation that Windows 8 Tablet (an actual tablet OS mind you), won’t appear until next year.
But still! Microsoft still has their massive desktop market, right?
Here’s the thing. Apple’s doing really well in the personal computer market. Based on traditional computers alone—laptops and desktops—Apple has 10% of the market. And that’s just in traditional markets. If you consider the iPad as a PC, Apple is the third largest computer maker by market share.
Add on to this two things. First, there’s anecdotal evidence that the iPad is cannibalizing netbook sales; netbooks, which are being sold at bargain basement prices and are a growth area for PCs…by which I mean Microsoft. Second, Apple is a profit-driven company, they sell their hardware at a profit, while Microsoft sells their software based on volume.
I remember Microsoft from The Bad Old Days, when they were the evil empire. They would enter a market that was established, give away a product for free with Windows (like Internet Explorer), and dominate based on the market share alone.
But the problem (for them) is that the personal computer market (tablets and smartphones) is moving away from business and into computer electronics. I’m a firm believer in the idea that Windows was sold to businessmen who thought they could buy cheap PCs and get the Mac GUI. But consumer electronics are sold one at a time, to people. People who will return them if they don’t like the experience, and, more importantly, tell their friends.
Microsoft, meanwhile, is still trying to sell to businesses, which was the mistake they made with the Zune—making a music player that the record labels would like. Apple, meanwhile, frustrating as some of their demands may be, tries to make their products fun to use. Simple and elegant. And I don’t know if Microsoft can manage that.
What does MS need to do? Can they enter the consumer electronics market?