Windows 8 Is Slowing Down Microsoft

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

In this computer age where almost every new application or technological upgrade is user-friendly, it isn’t right to presume that users can adapt immediately. Adaptation to a new product or service upgrade takes getting used to, all things being equal. The observations regarding the latest launch of Windows 8, Microsoft’s (NASDAQ: MSFT) latest PC operating system, have others saying that the touch screen control and new interface is delaying adaption and adoption of this new product. That isn’t surprising given the fact that many users have adapted and are comfortable with Windows 7.

The Bumpy Road to Progress

But we can’t blame Microsoft for launching Windows 8 and getting us out of our comfort zones because truly, they are a high-tech company who always had a penchant for product improvement, innovation, and diversification. Windows 8 has not performed as well as Windows 7 when it was launched. The dwindling economy is partly the reason for its low impact since customers have postponed their plans of upgrading to a new computer. Windows is in its eighth improvement, the latest better than the last with Apple’s (NASDAQ: AAPL) iOS, which is on its sixth system improvement now, with the company still finding ways to make it even better. Apple’s iPhone 5 also performed rather weak during its initial launch but gained momentum eventually. Windows 8 was launched in October 2012 and now has 35,629 applications, clearly showing that developers are taking more interest in the latest platform, with customers having more reasons to be interested.

A Competitor is Catching Up

Because sales of Windows 8 are not as high as expected, will this slow Microsoft down? It will be worthwhile to remember that the company operates in five divisions. Its PC operating systems where Windows 8 belongs is under one of its many business segments, the Windows and Windows Live Division. Microsoft’s most profitable unit is its Business Division, which generated $24 billion in revenues for the fiscal year 2012. The said division offerings include the Microsoft Office System, which provides business solutions designed for personal, team, and organization productivity. Their competitors want to cut into this fort including Google (NASDAQ: GOOG), which has spent six years promoting the idea with their Google Apps, a cloud-based application software. Despite the challenge, Microsoft is still an outlier in this division.

Tuning Up for More Speed

The Silicon Valley tech giant has retail stores too for their Surface tablets and Xbox game consoles. Opening more of such stores is a strategy that will help Microsoft sell more of the products that are designed to entertain and connect people. In fact, six of these new stores will open in 2013. This marketing tactic will also help them get more software sales, which would make them compete with Apple retail stores. It also poses a lengthier stride to race with Nintendo (NASDAQOTH: NTDOY), a Japanese company that  pioneered video game entertainment, who is a close competitor with their Wii home console, Nintendo 3DS and the new Wii U, which is attracting Mario and Pokemon fans like crazy. They are also gradually gaining pace in other fields as acquiring Skype and developing live, recorded, and on-demand television programming through the Mediaroom product.

Some Words Before the End of the Lap

It is true that Windows 8 will play a key role for the company in 2013 as it plans to change how tech gurus and average computer users currently experience laptops, desktops, and even smartphones. Although Microsoft’s other divisions are performing well, but this new launch will be the one that will draw the greatest and widest attention as it will largely determine the strength of the company’s name across all borders, all over the world. Competition is tough and the market is on a wait-and-see mode, associating everything with huge names like Google, Apple, and even Nintendo. But this tech giant is not slowing down anytime soon and may even take the lead once the momentum has been reached.


JosefRayDagatan has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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