This won't be just another upgrade. Windows 8 is nothing less than the linchpin to Microsoft's strategy for keeping Windows relevant — if not resurgent — as the shift to the post-PC computing era unfolds.
"The stakes are huge," says Charles King, principal analyst at research firm Pund-IT. "The company must play outside its comfort zone, but if Microsoft succeeds, the potential opportunities could be significant."
Microsoft declined to comment, preferring to reveal technical details at Build, says Frank X. Shaw, corporate communications vice president.
Traditional PCs remain by far the most widely used computing tools out there. The installed base of Windows desktop and laptop computers in use in homes and businesses globally exceeds 807 million and is projected to top 920 million next year, according to market researcher Gartner. Even so, Microsoft has fallen behind as consumers and workers begin to spend more time using touch tablets and smartphones to work, play and socialize. Sales of smartphones will soar 56%, to 467.6 million, this year, while sales of touch tablets will grow nearly four times, to 69.8 million this year, Gartner says.
Internet-connected mobile devices that respond to fingertip touches, instead of a mouse and keyboard or a keypad, are all the rage. The soaring popularity of Apple's iPhone and iPad touch tablet and Google Android smartphones have, in turn, spawned a burgeoning universe of graphical, touch-enabled software apps.
Microsoft, meanwhile, has scrambled to keep up in smartphones and has been left in the dust on touch tablets.
Yet, Windows and the ubiquitous Office clerical suite remain pivotal to the software giant's future, generating combined revenue of $41.23 billion and operating income of $26.4 billion in Microsoft's 2011 fiscal year, ending June 30. However, Windows revenue dipped 1% to $4.7 billion in the fourth quarter. For the fiscal year, Windows revenue fell 2% to $19 billion, while Windows operating profit dropped 6% to $12.3 billion.
Those slippages underscore the notion that "the post-PC world is about smartphones and tablets and their blazingly fast rates of innovation," says Scott Ellison, mobile industry analyst at IDC. "Microsoft needs to prove it can be more than a slow follower."
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