The Windows 8 tablet train wreck

http://www.extremetech.com/computing/108335-the-windows-8-tablet-train-wreck

by mrsebastian • 15 years ago

10 5 15 years ago

extremetech.com

untog• 15 years ago

First, if you already use Windows 7 — and hundreds of millions do — there is little reason to upgrade to Windows 8

Same as there was no reason to upgrade to Vista or Windows 7 itself. Yet plenty did and do.

Microsoft could buy out Nokia and create a beautiful Windows Phone 7 tablet.

Given that the distinguishing feature of WP7 is the Metro UI, what would the effective difference be between a Windows 8 tablet and a WP7 one? It seems like the whole point is merging these functionalities.

mrsebastian• 15 years ago

Compared to Vista -> 7, very few upgraded from XP to Vista. I think Vista's market share topped out at just 17 or 18%, compared to XP's 80%+. Windows 7 is now around 35%.

The difference between Win 8 and WP7 is cost, and the huge Windows ecosystem. MS is trying to bring some of that ecosystem over to mobile apps with the whole Metro/Windows Store thing. Hopefully it pans out.

teyc• 15 years ago

Microsoft can no longer command high prices for its tablet OS because it lacks incumbency and vertical integration.

The net result is her competitors are driving MS towards a cliff of zero or low margin OS and inexpensive apps.

If you look at Windows 8 carefully, the ARM version will not run desktop mode. This gives it some protection that a tablet manufacturer adding on a $20 keyboard turns a tablet into a replacement OS. However, as more applications become metro-fied, its margins will be totally fried.

This is why Microsoft is pinning its hopes on the server. Azure and various cloud services and tight developer tooling might make up for the lost revenue.

jinushaun• 15 years ago

Interesting analysis. Everyone focuses on technology, but Win8 has a lot of unanswered business questions. The premise of the article is essentially, if MS sells Win8 tablets as a tablet (i.e., iPad), how can it continue to charge desktop prices for Windows and Office in Win8? Especially since MS repeatedly touted the "dual use" tablet/desktop scenario at BUILD. Both of these products are basically free on WP and their equivalent products are cheap on iOS and Android.

The options, as I see it are:

1. Continue to make Office desktop only (does not work in Metro) 2. Create a tablet-only SKU for Office (does not work in Desktop) 3. Create a dual use SKU for Office (tablet + desktop). Ultimate? Sounds expensive. 4. Switch to subscription pricing for Office

None of these sound ideal. I think MS will ultimately go with #4. They've been planning to do so for half a decade now.

missingm• 15 years ago

The huge thing that this article fails to take into account is the frequency of upgrades. Most people are not buying brand new PCs every two years, but almost everyone upgrades their phones that frequently and I'd be willing to bet that tablet upgrades will follow a similar pattern.

So a user who has a Windows Phone and a Windows Tablet will bring in $30 ($15 licensing fee x 2) every two years. If the average PC is upgraded every 4 years then the $60 of revenue for Microsoft that they realize in a 4-year span in this hypothetical post-PC world would end up perfectly matching their average revenue for Windows right now.

Does the average home user buy a full-blown copy of Office? Probably not, but I'm sure that people will be willing to pay a monthly fee to back up their documents or access some sort of Office subscription. Businesses will, of course, get on board with a subscription model too. Or if they're willing to keep paying full price every few years that's just fine as far as Microsoft is concerned as well.

Furthermore, some users will end up with a Windows Phone, a Windows Tablet, AND a Windows PC. That's even more licensing revenue for Microsoft.

$15 sounds scary compared to $60, but only if you think that people will hang onto their phones as long as their PCs. They won't. If all of this plays out as Microsoft hopes then they are going to be just fine.

The Windows 8 tablet train wreck

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