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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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RE: MS just doesn't get it...
By drycrust3 on 7/27/2013 5:40:00 PM , Rating: 1
MS is still the worlds most dominant OS by a long shot.

If you look carefully at that graph, you will notice a trend that almost every commentor has either stated or hinted at: desktop operating systems are declining, mobile OSes are rising. The two desktop operating systems on the graph, "Windows" and "Mac", both declined over the time period covered. Not once, in the entire time frame, did the percentage of users of either of those OSes exceed the value they started with. On the other hand, Android and iOS both improved over the time frame.
The next point is "Windows" covers quite a range of operating systems, it could meaning anything from Windows 98 through to Windows 8. The fact is "Windows XP" (37%) is currently the second placed desktop OS, with Windows 7 (44%) being first. The importance of this is that 37% of users are using an OS that is famous for its insecurity and will soon not be supported by the manufacturer.
Since these are people where, at the very least, XP is adequate, and quite likely the hardware is also adequate, when they are forced to upgrade they will be looking for something that is a bit cheap that covers the basics such as browse the internet, read some newspapers and blogs, do some emails, stuff which doesn't require a high powered computer running the latest Windows OS. They are perfect targets for Android, iOS, and e-readers like Kindle.
Notice something there? None of those aren't made by Microsoft. Sure, Microsoft gets there cut, but that misses another important point: every time Microsoft get a patent licence fee that is a sale they didn't get, and that is a lost customer.

RE: MS just doesn't get it...
By retrospooty on 7/27/2013 10:39:39 PM , Rating: 2
Its not news or a surprise that windows is on a slow and steady decline. That changes the facts how exactly?

RE: MS just doesn't get it...
By drycrust3 on 7/28/2013 12:41:17 PM , Rating: 2
The change is that the world has changed. The Microsoft that got to be number 1 isn't the Microsoft of today, and that is what Tony was talking about.
When Microsoft became Number 1 it was because they saw that a windows environment was the way to go and worked really hard to make better software than anyone else that worked in the windows environment OS they created.
Now, the management has changed from a company that sees the future and runs towards it, to one that wants to try and hold onto the past.

RE: MS just doesn't get it...
By retrospooty on 7/28/2013 4:56:00 PM , Rating: 2
I agree microsoft has made a lot of bad moves lately. They are declining. But they are still number one by a huge margin. It's going to take a long long time before that changes. The entire business world still runs on Microsoft. Like I said call me when they can make a single Mac iPod iPhone or iPad without the entire process running on PC. If anyone can do it Apple can, and they are not even close. The massive infrastructure just doesn't exist anywhere outside of Microsoft. there is Unix, Linux, and several companies that all do their own tiny little piece but no one else does the whole package. No one else has even started to attempt to think about making a try at it.

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