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Bleaker forecast pushes Windows rebound into 2014




Gartner today downgraded its estimate of Windows' 18-month future, saying that Microsoft's platform will take a hit this year, then rebound in 2014 at a more muted pace than it forecast two months ago.

In 2013, Windows' share of operating systems powering devices shipped from manufacturers will drop by 2% compared to the year before, said Carolina Milanesi of Gartner.

The following year, however, Windows will post an 11.4% increase over 2013, climbing out of that year's gully to actually exceed the number of shipped devices in 2012 by 9.5%.

Gartner's prognostications today were more bearish than those the research company made in April. Then it said that the various editions of Windows -- for everything from traditional PCs and radical hybrids to tablets and phones -- would climb 2.3% in 2013 and an additional 12.2% in 2014.

"We're more conservative in the short term about Windows' chances," said Milanesi in an interview today, reflecting on the differences between the April and June estimates. The gaps between the two forecasts for total Windows device shipments were between 15 million and 19 million units, depending on the year.

Why the change in Gartner's crystal ball?

"Windows RT is getting squeezed between the smaller form factor [tablets] on one side and the tablet and hybrids on the other," said Milanesi, referring to Gartner's earlier belief that Microsoft tablet-specific OS would add some oomph to Windows. That's no longer how it looks. "We thought that the smaller tablet form factor would benefit Windows RT, but OEMs are walking away from RT."

Microsoft and its partners, dubbed OEMs for "original equipment manufacturers," are instead pushing into smaller tablets with Windows 8, the full-blown OS. And Gartner is skeptical that Windows 8 will prove to be a good idea on smaller screens, even though there seems to be some interest from enterprises.

The end result: A delay of Windows device shipment gains until 2014. "They'll seed the market with a better selection of devices in Q4 [this year]," said Milanesi of Microsoft and its OEM partners, who will hope that a wider selection of touch-enabled hardware will spur a turnaround in 2014.

Microsoft's fundamental problems remain its reliance on the traditional PC market, which will continue to shrink, and its inability to gain ground in either tablets or smartphones, the two other major components of what Gartner describes as simply "devices."

In other words, while Windows may be the foundation of more tablets and phones this year than last, those devices won't be enough to make up the slack of slumping PC numbers.

"Windows is still way skewed to the PC market, and Android to the phone market," said Milanesi. Apple, on the other hand, has less concentrated on one portion of the device pie.

According to Gartner, 85% of Microsoft's current sales of Windows are in the PC market, while 90% of current Android sales are in mobile phones. In the first quarter, Apple's unit sales split was about 62%/32% between the iPhone and iPad, with 6% attributed to the Mac.

Microsoft's share of all computing devices -- personal computers, tablets and smartphones -- will remain flat for the next 18 months, Apple's will slowly grow, but both will be increasingly dwarfed by Android, the Google OS whose sole strength is in phones. (Data: Gartner.)

Gartner knocked millions off its revised estimates of PC shipments -- desktops and notebooks -- and slightly boosted its bet on "ultramobiles," which include everything from thin and light notebook-like systems to slate and hybrid devices running Windows 8.

Its forecast that the combined PC and ultramobile markets will contract by 7.3% was very close to the 7.8% downturn that rival research firm IDC pegged last month when it revamped its PC shipment estimates.

Without ultramobile devices -- and not all will feature Windows -- the PC business is in deep, deep trouble, Gartner indicated. It forecast that traditional PC shipments will fall 10.6% this year and another 5.2% in 2014 to end up at 289 million units that year, compared to 2012's 341 million.

Milanesi isn't the only or the first analyst to predict heavy weather ahead for Microsoft before some sun breaks through. Last October, Forrester analyst Frank Gillett predicted that 2013 "is going to be ugly" for the Redmond, Wash. developer.

But even though her numbers for Windows were gloomier today, Milanesi remained optimistic about Microsoft's chances. "They had the OS," she said, referring broadly to both Windows 8 and Windows RT, "but they didn't have the devices. There were a whole bunch of things that did not fall into place last year and the first half of this year. But with the processor changes from Intel, smaller tablet form factors and other designs, I think things will be quite interesting for Microsoft in 2014."

This week will be important to any optimistic prognosis, including Milanesi's: Microsoft will unveil Windows 8.1, a free upgrade for Windows 8 and Windows RT, on Wednesday at its BUILD developer's conference in San Francisco.

Cast by Microsoft as a customer-feedback-driven refresh, but as a more dramatic revamp or even backtrack by outsiders, Windows 8.1 will allow for 8-in. tablets and, along with new hardware designs, perhaps prompt Microsoft's customers to adopt the unusual operating system.

"The timing is way different this year [than last]," said Milanesi. "There is a lot coming from a hardware perspective in the second half of the year."

This article, Bleaker forecast pushes Windows rebound into 2014, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about windows in Computerworld's Windows Topic Center.


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