Market Overview

Windows 8 Could Flop with Enterprise Users


Microsoft (NASDAQ: MSFT) might have to rely on techies and affluent consumers to sell software upgrades and Windows 8 PCs and tablets in the coming year.

According to DigiTimes, global enterprise users at small- and medium-sized firms are unlikely to upgrade when Windows 8 is released. In order to stay afloat during these hard economic times, many of these companies held onto Windows XP for as long as they could. They have now begun to make the switch to Windows 7, skipping Windows Vista entirely. With such a recent upgrade, these firms are unlikely to spend additional funds on another OS.

This could be a problem for Microsoft, which relies heavily on business users to bolster profits and maintain a significant edge over the competition. In the consumer business, Apple (NASDAQ: AAPL) continues to increase its market share with both the iPad and the MacBook line of computers. Apple is also making progress in the corporate world by selling tablets to a large number of businesses. But when it comes to desktops and laptops, Microsoft still leads the business sector.

The company hopes to maintain that lead -- and cut into Apple's tablet business -- by releasing a new tablet, Surface. The device, which could cost as much as $800, was designed to be more than a typical tablet. With a unique case that doubles as a keyboard, and an operating system capable of running full Windows programs, Microsoft is building its tablet to be a true PC replacement. This is notably different from the strategy employed by Apple, which designed its tablet to run an operating system that is currently separate from its Mac OS.

In the coming year, Microsoft hopes to sell a few million Surface tablets. Some consider that to be a conservative estimate, especially if the Windows maker decides to defy expectations and undercut Apple's pricing structure. But unlike iOS, which has only one manufacturer, Windows 8 tablets will come from several manufacturers. If Microsoft, Dell (NASDAQ: DELL), and Hewlett-Packard (NYSE: HPQ) sell just four million Windows 8 tablets each, the new OS would power a total of 12 million devices.

And that does not even include the millions of Windows 8 PCs that manufacturers expect to sell.

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