Windows 8 – The new Microsoft Disaster??

indar kumar is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Paul Otellini, the CEO of Intel (NASDAQ: INTC), recently announced that Windows 8 is not ready, but it will launch anyways. What does this mean for investors? What does this convey to the consumers?

According to the Intel chief, there are still some unfixed “bugs,” and “improvements” needed to be made to the operating system. Microsoft (NASDAQ: MSFT) is getting itchy and wants to launch its flagship software soon, so that it can compete with Apple (NASDAQ: AAPL) during the upcoming holiday season. Apple had a buggy new Map app, and still it released on the iOS 6; this may be one reason Microsoft is willing to take some risks and put the new operating system in the customer’s hand before it is completely prepared.

Intel is Microsoft’s closest ally, and these remarks will not go down well with the creator of Windows. The comments have been taken as a voiceover of many critics of Microsoft. According to Otellini, “Windows is fundamentally sound but the operating system lacks a wide range of robust applications and PC makers haven't had enough time to work out bends with so-called drivers, which connect software to hardware such as printers” With comments like these it’s no wonder skeptics believe Windows 8 will become a replay of Bob, Windows ME and Vista all bundled into 1.

Foreword from the critics

Windows 8 seems to be a jump backward in terms of technology and usability. It might be ok for the smartphone, but it will be a disaster for the desktop. It is hard to use, the colors of the desktop are sickening, and the rectangular layout makes one uneasy. Rather than boosting sales, it will have an opposite effect as large enterprises and consumers will see no reason to switch to Windows 8. Of course it’s not going to lure any Apple user to switch to Windows, but it may make LINUX more popular.

Microsoft’s Woes

Although the biggest setback for the company undoubtedly came from Intel’s statement, Windows RT, the ARM-based version of the operating system, has faced some impediments lately. This has widened the rift between Microsoft and major PC makers like Dell and HP, which have struggled this year as tablets such as Apple’s iPad became more popular among consumers and employers. Rob Cihra, an analyst at Evercore Partners, recently downgraded his PC unit forecast to negative 4% in 2012 and zero growth in 2013. Before this he had predicted zero growth this year and 4% next year. According to him this is the biggest decline in PC growth in the last 20 years.

Being Positive

Microsoft however, has scuffled with all the news and has released a statement saying that “With over 16 million active preview participants, Windows 8 is the most tested, reviewed and ready operating system in Microsoft's history." In addition, the early reviews of Windows 8 have been on the positive side. CNET awarded the operating system 4 out of 5 stars, praising the software highly and saying it is “aggressive and forward thinking.” Microsoft has declared that Oct. 26 would be the date for the Windows 8 launch, so investors should mark their calendars and keep an eye on this company. 

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