Windows 8 judged a flop as PC savior

The reports of the PC’s death may not have been greatly exaggerated after all.

Microsoft’s Windows 8, which was hailed as the savior of the personal computer market, has failed to stop the bleeding for what was once the world’s most valuable company and, analysts say, may even have made matters worse.

Microsoft’s latest operating system hit the market in late October and was supposed to make laptops cool again. With its revolutionary touchscreen technology, Microsoft bragged that it paired the best of a tablet with the best of a laptop, in hopes that it would revive the dying PC market and restore Microsoft’s image atop the tech world as a worthy competitor to Google and Apple.

But disastrous numbers out this week indicate the company’s ambitious rollout has failed to do that, handing yet another setback for the aging tech giant that has seemingly lost its way in an ever-changing marketplace.

Not only has Windows 8 failed to win consumers back, but the drastic changes to the company’s operating system have hurt it from both ends, according to a report from research firm IDC.

The effort to make it like a tablet also made it different enough from previous PCs as to become “a less attractive alternative to dedicated tablets,” IDC vice president Bob O’Donnell said in the report.

“Unfortunately, it seems clear that the Windows 8 launch not only didn’t provide a positive boost to the PC market, but appears to have slowed the market,” Mr. O’Donnell said. “Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.”

Stephen Baker, vice president of analysis at NPD Group, based in Port Washington, N.Y., said Microsoft tried to respond to the tabletized world with Windows 8, but the product was a hybrid, neither fish nor fowl.

“Windows 8 is a reaction to that shift,” Mr. Baker said. “It’s a re-imagination of Windows focused on being a more touch-enabled, screen-focused operating system.”

The problem? Even with a touchscreen, “they’re still more PC-like, than they are tablet-like,” he said.

IDC on Wednesday blamed the Windows 8 fiasco for PC sales falling at the fastest rate in history.

In the first three months of the year, global shipments declined nearly 14 percent from the same period in 2012.

Microsoft’s stock fell more than 4 percent to $28.93 on Thursday, the first day of trading since the IDC report was released, in a sign that investors have joined consumers in their distaste for the Windows 8.

IDC was not alone in pointing to the demise of personal computers.

In a separate report, Gartner, another technology research firm, noticed that PC shipments fell 11 percent during the quarter, which is the worst drop since the company began following the market more than a decade ago.

“Microsoft just made some decisions around the first introduction of Windows 8 that, in hindsight, probably weren’t good decisions,” Mr. Baker said.

According to industry analysts, Microsoft no longer understands the market or the company’s customers.

“The personal computer business has been shrinking in recent years as tablet computers like the iPad have been growing. It was thought that if Microsoft was successful with their Windows 8, they could slow the decline,” said Jeff Kagan, a technology analyst based in Atlanta. “That is not happening.”

The computer industry isn’t going away but is evolving to make room for tablets, and companies like Microsoft that fail to keep up could be left out, Mr. Kagan said.

“Think about it,” he said. “We aren’t using fewer computers. Rather, we are using computers differently. Some companies will transition well and other will not.”

Mr. Kagan said Microsoft is in “serious trouble.”

“Microsoft needs to reconnect with their customer base with products that users want, or they will be in serious trouble going forward,” he said.

But according to Mr. Baker, not only is Microsoft not on the verge of folding, it has overcome far worse in the past.

“Microsoft is an awfully big company to say they will go out of business because of one product,” Mr. Baker said. “If Windows Vista didn’t put them out of business, nothing will.