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  (Source: AP)
But Ballmer says improvements, including a new Surface and a new Metro Start Button, will win customers back

At a quarterly all-hands type meeting, Microsoft Corp.'s (MSFT) boisterous and ebullient CEO Steve Ballmer was more sedate than usual.  While he raved about the upcoming next generation Surface tablet -- which was garnering rave reviews internally -- he also reportedly owned up to an unpleasant fact that Windows 8 isn't selling well.

The news -- which was pretty much a known fact to analysts and tech enthusiasts already -- came shortly after Microsoft's major leadership shakeup, in which it put the people in charge of Windows 8 (Julie Larson-Green, Tami Reller) in charge of key leadership positions over the entire company.

Revenue for the Windows unit dropped 55 percent (-$1.3B USD) in the second calendar quarter of the year (Microsoft's fiscal Q4 2013).  After beating street expectations the previous quarter, Microsoft saw its efforts unravel badly with sales of both Windows and the embattled first generation Surface sinking to Vista-like levels of market apathy.

Steve Ballmer
Windows 8 is turning into a nightmare for CEO Steve Ballmer. [Image Source: AP]

Microsoft and Mr. Ballmer came under fire from some of their major partners.  Samsung Electronics Comp., Ltd. (KSC:005930) blamed Microsoft for drooping PC (and by proxy semiconductor component) sales.  Jun Dong-soo, head of the memory chip unit who sells DRAM and NAND to PC makers, called Windows 8 "less competitive" and complained, "[It is] no better than the previous Windows Vista platform."

Those are pretty harsh words coming from a major partner.

At the meeting Mr. Ballmer tried to convince employees that the free Windows 8.1 update would make up for the flop of its predecessor.  He pointed to the return of a "Start Button" (although it's not the Start Button you used to know) and the use of telemetry data to improve weak spots in Windows 8 as critical keys to the turnaround.  He also discussed increasing spending on professional services (consulting), although the leaks from the meeting made it unclear whether Microsoft is looking to recruit outside consultation for itself or make money off providing it to others.

Windows 8.1 Preview
Ballmer thinks a new Metro Start Button will thrill Windows fans back to the ranks.
In the second calendar quarter Google Inc. (GOOG) ChromeBooks gained major ground on Windows PCs, establishing a beachhead of approximately 4-5 percent of total personal computer sales, and a quarter of <$300 USD personal computer sales.  Some OEMs such as Samsung and Acer, Inc. (TPE:2357) (another prominent critics of Windows 8) have turned to Chromebook offerings, and may be eyeing dumping Microsoft entirely, shoudl consumers continue embracing Google's offerings and rejecting Microsoft's.

Microsoft can take some solace in that Apple, Inc. (AAPL) saw sales of its Mac computers miss expectations, leaving Google the only clear winner in the PC market for the quarter.

Source: NeoWin

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No way!
By 91TTZ on 7/25/2013 3:07:47 PM , Rating: 5
This isn't happening!

I was told that Windows 8 is flying off the shelves... I was told that the people who don't like it are just afraid of change... I was told that people that talk bad about it are just a very vocal minority... I was told that Windows 8 is going to capitalize on the mobile revolution and that it's the perfect device for convergence.

Why is Ballmer saying this?

RE: No way!
By kmmatney on 7/25/13, Rating: 0
RE: No way!
By dgingerich on 7/25/13, Rating: 0
RE: No way!
By karimtemple on 7/25/2013 3:49:01 PM , Rating: 2
LOL! You need to start a Sarcasm Font petition. You need it.

RE: No way!
By retrospooty on 7/25/2013 4:45:45 PM , Rating: 3
Ya... a "sarcasm font"... Now there is a real useful addition. ;)

RE: No way!
By CaedenV on 7/25/2013 4:06:53 PM , Rating: 2
I have used Win8 from the DP days, and after CP it was actually quite usable. Admittedly it did not make a whole lot of sense to me until I used it on a touch screen device, but after that I was very easily able to translate everything in a way that makes sense on keys and mice.

But the new UI is not the real issue here, because it works just fine. Usability is not even a huge issue here, because that too works just fine. The issue is that for all of the 'new' that win8 brings to the table, it does not bring much in the way of new usability. I do a lot of file transferring and make much use of the ability to manage several file transfers, and I love that I can naively run ISOs now instead of buggy emulators, but these are not 'revolutionary' changes in usefulness. If it was not for the $40 entry fee, and the ability to upgrade from 7 Home to 8 Pro then there really would not have been a compelling reason for me to upgrade.
Win8.1 is a nice step up in the realm of making Metro more user friendly and has customization options... but other than for system settings I pretty much never look at metro, so it is a moot point. Metro has no 'killer apps' for office and productivity work, and even if they did then the desktop versions would be more useful already. The whole point of metro is to introduce the new store front and gain a new income stream... and that is a perfectly good thing for MS to do! If it came between buying software from some random store online vs buying something via the Windows Store I would obviously trust the Windows store to keep my CC information safe, and trust that they have done some work at making sure there is no real malware in whatever I am buying. Having a store front is a very good thing! But, the only way to make metro apps useful is to have a windowed option on the desktop, or to sell desktop software via the metro store. Outside of that people are simply not going to make much use out of it.

And even that does not address the issue of win8 bringing any extra usefulness over win7. Give us better networking options, or some sort of 'home cloud' services for our music/picture/movie collections. Give us more inter-connectivity between our windows products (xbox, WP, PCs, tablets, etc.). Just give us something that simplifies our lives and helps people do what they want to do.

At the end of the day Win8 is a great rebranding of Microsoft which is something that was becoming an increasing issue, so it is good that they did it. But people buy things to use them, not simply because they look similar. Give people a clear reason to upgrade and they will do it.

RE: No way!
By kmmatney on 7/26/2013 11:55:21 AM , Rating: 2
Overall I do like Windows 8, and would personally buy it over Windows 7 if they are the same price. But it took a fair amount of work to get it to be usable on my work computer. I still haven't figured out how to completely get rid of the charms panel, although there are reg tweaks to make it less intrusive. I did try to use the start window (turned off the option to skip it), but it just doesn't work for me, and I now have gotten into the habit of just hitting the desktop icon.

It does look like it might be quite useful on a tablet, but on a desktop I'd like the Apps to have an option to be windowed, and an option to easily close an App. For nw, I've just removed every Metro App, as they are worth the disk space.

RE: No way!
By 91TTZ on 7/27/2013 7:45:37 PM , Rating: 2
At the end of the day Win8 is a great rebranding of Microsoft which is something that was becoming an increasing issue, so it is good that they did it.

I think that Windows 8 and Surface were a horrible rebrading of Microsoft. Both products are failures. Microsoft should have stuck to its core competencies. This rebranding is like MySpace's rebranding, or Blackberry's rebranding- bold attempts, but failed attempts. A rebranding is a risk- if your brand is already popular you don't want it to become synonymous with failure. You don't want a New Coke.

RE: No way!
By ie5x on 7/26/13, Rating: 0
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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