Forrester paints a rough future for Windows

Tablets and smartphones will continue to eat at the PC's dominance and all Microsoft can do is hold on, says the firm.

Anyone who thinks I've been down on Windows 8 needs to read the latest research from Forrester, because it makes me look like a cheerleader by comparison. It paints a future where the best Microsoft can do is hold on to what it has for as long as it can.

The report, authored by chief analyst Frank Gillett and a number of other Forrester analysts, says that in the post-PC world, there is no single dominant OS or vendor. Microsoft has the PC, but it can forget enjoying a similar share of tablets and smartphones.

"Microsoft is extremely late to the market expansion into mobile and has lost its dominant position," Gillett wrote. "Now it’s one of three contenders. So Windows survives, and is not in the downward spiral of RIM, Palm, and Nokia, but it is no longer the king of the expanded personal device hill, which now includes PCs, tablets, and smartphones."

Gillett's methodology is debatable. He combined traditional PCs, tablets and smartphones into a complete group, called "personal devices." Taking all three together, Microsoft's share of all operating systems has gone from 95% in 2008 to just 30% in 2012.

I have a problem with this logic because these devices are all distinctively different in use. I wouldn't compose this blog on either a smartphone or tablet, only maybe the latter if I invested in a keyboard. And then the question becomes why I would buy a keyboard when I already have a PC. They are not equals, except in one use: consumption. At that point, then they are equal.

Enough nitpicking. Gillett says 2013 will be a "very tough year" for Microsoft because it needs Windows 8 to staunch the bleeding on the PC side. "Microsoft will lose incremental share [between now and 2016], but they'll stabilize at 30%," he wrote. "By 2016 [unit sales] will be ahead of where they are now in terms of users. Microsoft will survive, but we don't see a way they can reclaim lost ground."

Again, I find myself disagreeing with Gillett's smartphone and tablet assessment. He says that by 2016, Microsoft will have just 14% of the smartphone market, but 27% share for tablets.

This I just don't agree with because the tablet market is far more dominated by one player – Apple, of course – and it doesn't have the turnover of smartphones. Plus, carriers are getting fed up with Apple's bullying and Android fragmentation and confusion. They may just rally around Windows Phones.

This, plus the subsidies in the smartphone business, means Microsoft has a better chance than it does in tablets, where Windows tablets thus far are much pricier than the iPad. My feeling is that the iPhone will be easier to dislodge than the iPad, for these reasons.

Now, the reason Gillett predicts that 2013 will be "ugly" for Microsoft is because the transition to Windows 8's new UI will be difficult thanks to "The most radical overhaul since the original Windows replaced DOS." People will be slow to adopt it until they get the hang of it, and I suspect people will also hold off waiting for the application ecosystem to get up to speed.

Gartner has said it doesn't expect Windows 8 adoptions to begin until at least 2014, so Forrester isn't alone in this prediction. Gillett predicts that Microsoft and its partners will have to revise their pitches to consumers and enterprises alike so there isn't a repeat of Windows XP, where customers just stick with the old OS.

I agree that Microsoft has a major challenge ahead in selling Windows 8, especially to enterprises. To me, the migration to the new UI is more akin to what we went through in moving to Windows 95. Those days were rough, especially with games. Back then, games were written right to the metal. There was no DirectX library. Playing DOS games on Windows 95 was a pain until the game developers made the migration to Windows and DirectX.

With Windows 8, it's not just games; it's all apps. The good news is that Microsoft has done its level best to grease the skids, and with the existing Windows Phone 7 base, we may get a jump start.

But, yes, in 2013 Microsoft executives are going to squirm through a few quarterly earnings calls.

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Copyright © 2012 IDG Communications, Inc.

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