Microsoft (NASDAQ:MSFT) wants you to know something…
It’s very sorry… it misses you… and wants you back.
Now, this might come as news to you, as you may not even realize that you broke up in the first place!
After all, chances are you have a PC with a Windows operating system… you used Microsoft Word to create your last document… and you may use Excel for your spreadsheets.
Even so, Microsoft and its customers are on very shaky ground.
Here’s where the rough patch came from – and what the company is doing to win back public approval…
Microsoft’s Evaporating Market Share
It’s no secret that Microsoft still completely dominates the PC world. And with a 90% share of PC and laptop operating systems, that position isn’t going to change anytime soon.
However, the way we use computers has changed. More of what we do on a “computer” is done on a tablet or smartphone.
And Microsoft is all but absent there.
Its market share among smartphones is a paltry 3.6%… and with tablets, it’s a virtually non-existent 1.6%. Indeed, Microsoft estimates that its share across all personal computing devices combined has fallen to 14%.
The story is similar with browsers. Microsoft’s Internet Explorer has steadily lost share to Mozilla Firefox, Google (NASDAQ:GOOGL) Chrome, Apple (NASDAQ:AAPL) Safari, and various other proprietary browsers that come with smartphones.
And what has Microsoft done to fight back?
The Not-So-Great 8
For a long time, Microsoft’s scattergun approach to winning back some affection was akin to a wayward significant other who kept drunk dialing you at 3 a.m. and wondering why you always hung up and moved on to someone else.
Take the much-maligned Windows 8, for example. If you want a case study of how not to design a product, this is it.
The operating system was originally crafted for mobile devices, but was then shoehorned into desktop and laptop mode.
It was a sloppy and ill-conceived end product that tried to please everybody… but ended up pleasing nobody.
And while the Windows phone has been a modest success, going from a 0% share to just 3.6% isn’t the kind of success befitting a company of Microsoft’s standing. It’s accustomed to being No. 1.
Microsoft’s solution?
Windows 10…
From Sloppy Drunk to Prince Charming
In Windows 10, the company has sobered up, got a job, and is sending flowers.
So what’s in the system to woo you back? It comes down to six key factors…
Factor #1: A More Versatile Operating System. The biggest piece of Windows 10 is the operating system itself. It’s set to be everything that Windows 8 was supposed to be, but wasn’t. In other words, it provides the same experience for tasks, whether you’re using a smartphone, tablet, PC, or even Xbox (which I’ll cover in a second). Importantly, this means a seamless transition between touchscreens and non-touchscreens.
Factor #2: Cross-Platform Apps. With a cross-platform operating system comes cross-platform apps, too. The new Windows app store is supposed to offer applications that scale by platform and, again, provide a similar user experience, regardless of what kind of device you’re using.
Factor #3: A New Browser. “Project Spartan” is set to replace the much-reviled Internet Explorer. The truth here is that while Internet Explorer was only as bad as people say for a brief period early in the century, it’s still been losing market share to other browsers. However, Spartan is a complete reboot and provides some neat features that Microsoft thinks you’ll enjoy. This includes the ability to doodle on a webpage, save it, and share it with others. In addition, Microsoft says Spartan will make it easier to read content offline than existing browsers.
Factor #4: Say “Hi” to Cortana. Apple has Siri. Google has Now. And Microsoft is responding with a big upgrade to its own digital assistant – Cortana. Like the rest of Windows 10, the emphasis here is on Cortana being able to work properly across devices.
Factor #5: An Xbox-Windows 10 Marriage. Microsoft’s Xbox has steadily lost share in the console gaming market to Sony's (NYSE:SNE) PlayStation. But all gaming consoles have been losing to the PC, where Microsoft reigns supreme. When you combine the Xbox and PC gaming, Microsoft has a leading share. So it only makes sense for the company to enhance that strength by combining those two platforms. Its Xbox Plus PC will be brought into the Windows universe and will be one of the platforms on which Windows 10 is designed to run. The compatibility will run in the other direction, too. Many Xbox games will be playable on PCs, and even tablets and smartphones.
Factor #6: Holograms. Yes, holograms. Windows 10 is designed to work with a new hologram system that the company is designing. The timing may seem strange, coming right after Google recently withdrew its Glass eyewear product from the consumer market. But Google isn’t abandoning mainstream holograms; it’s just retooling the technology. Google and Microsoft are both convinced that in the future, many people will want to be immersed in information (at least sometimes) – and Microsoft’s move signals that it’s looking to tomorrow’s technology today, not merely playing catchup with its competitors.
The Prognosis for Microsoft
So will Microsoft succeed with Windows 10 – and, in turn, woo back the customers it’s lost?
It’s going to be a hard slog.
Those customers have since moved on to Apple or Android – both of whom are pretty good partners. Returning to an old flame rarely works out. And for Microsoft, returning to a market-leading share of personal devices from the 14% it currently has will be no easy task.
But remember, there was a time when a company called Google had zero share of the search engine market… and things turned out pretty well in the end!
There’s no doubt that Microsoft suffers from previous baggage, but it’s got $90 billion in cash to spend in an attempt to regain customers.
If nothing else, a successful Windows 10 rollout will ignite further competition between Microsoft, Apple, and Google – and force everyone to better themselves. So no matter what happens, it’s a positive scenario for consumers and investors alike.
To living and investing in the future,