[Windows 8 General] e.mote:
IDC source: http://www.idc.com/getdoc.jsp?containerId=prUS24065413

"PCs include Desktops, Portables, Mini Notebooks, and Workstations and do not include handhelds, x86 Servers and Tablets (i.e. slate form factor devices regardless of OS or chip type, such as iPad, Android, or Windows-based Tablets)."

The wording is a bit ambiguous, as it's not immediately apparent whether hybrids--the crux of the Win8 push--are counted as "portables" or not counted as "tablets." From context, one can assume that hybrids are indeed counted, as it makes little sense to criticize Win8 if its key products are ignored. Even without context, hybrids as sold aren't "slate form factor devices," even if they can be detached and used as one.

Ambiguity aside, the facts of the finding are that PC sales decline is accelerating. That Win8 may have made it worse isn't material. What's material is that it failed in curbing or even slowing the downtrend. Rather than wrangle about who's to blame, let's figure out what's next.

There are no sales drivers for PCs, other than to replace obsoleted hardware. In years past, hardcore PC gaming was the main impetus, but that now has largely migrated to consoles. As overall PC uses plateaued, or even reduced, the inevitable push is toward lower pricing. We've already seen this effect with the popularity of cheap netbooks. The netbook died out not because it's a fad, but because Intel & MS constrained its capabilities (1024x600 display, slow Atom) so as not to cannibalize their more profitable products. Even without the iPad's emergence, the PC market was artificially propped up, and ripened for a fall.

But smartphones and tablets happened. Like netbooks, they're more portable, simpler, and cheaper (than PCs). While many have focused on the "portable & simple" aspects, I think just as important if not more is the "cheaper" factor. People like cheap. Tablets are the new netbooks.

In that sense, it doesn't matter what fancy UI or doodads Win8 has. It has no new uses that users can't already do elsewhere. No new uses => lower prices. Win8 actually raised the median PC pricing. For this fall, Win8.1 will at best bring pricing back to PC norms (with lowered touch-screen costs). But the cat is already out of the bag: cheap tablets that can handle the bulk of consumer activities. Computing is no longer a Wintel monopoly.

"What's next" is straightforward for the near term: As Win8.1 devices will be largely the same as Win8's in both capabilities and pricing (albeit slightly improved), then sales performance will be largely the same (albeit slightly improved). Windows will not materially affect the downtrend.

The inevitable Microsoft retrenchment in 2014 is more difficult to call. A management shake-up is the most likely. What follows that is a bit hazy, because I don't think there is a Plan B. Metro is it. Probable short-term fixes would include the easy things like restoring boot-to-desktop and Start Button. We may see a bifurcation into Windows Pro (desktop) and Windows Modern (Metro), with more emphasis on integration of the two rather than replacement. We can speculate on wilder options like making Windows free for licensing, and relying on updates & services for revenue, but that's not the way to bet.

A big company like MS is like an ocean liner: It can't spin on a dime and discard its entire business model; it can't discard its cash cows. That would take a larger disaster, and Windows isn't yet at that point. But MS is heading down that path. Perhaps it should take on RIM's former co-CEOs as advisors on what (not) to do next.

Lastly, here's one certainty we can bet on: There will be a Windows 9 next year. With the reception Win8 is getting, MS doesn't have the luxury of another year of incremental upgrade.