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October 24, 2012

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Doubts emerge over Windows 8 impact on tablets and smartphones

MICROSOFT Corp will launch the next-generation Windows 8 system in China and worldwide on Friday, one of the most eagerly-anticipated software upgrades in the technology industry, the company said yesterday. But PC makers and analysts are cautious about the impact the software will bring.

"We are glad to showcase Windows 8 in China, the world's biggest personal computer market," Ralph Haupter, Microsoft China's CEO and chairman, said during a Windows 8 preview event held yesterday in Shanghai.

Microsoft will offer the Windows 8 and Windows 8 Pro as well as its new tablet computer Surface in China from Friday.

During the Shanghai event, 15 companies showed off 52 products, including tablet computers, laptops and all-in-one desktop computers, running on Windows 8. The companies included Lenovo, Hewlett-Packard, Acer and Sony.

The products feature local applications, including instant message, map, weather forecast, dictionary and stock information, such as Tencent's QQ, Sina Weibo and Ctrip apps which are all available on Microsoft's online store.

Microsoft's share in the computing device system market fell from 70 percent to 30 percent from 2008 to 2012 because of the popularity of new devices like Apple's iPad and iPhone and other models running on Google's Android, research firm Forrester said yesterday.

While Microsoft is touting the launch of Windows 8 as the savior of the computer industry, PC makers and analysts are increasingly skeptical that the new operating system will lure consumers away from tablets and smartphones.

Even Intel Corp, which makes the processors at the heart of 80 percent of PCs, doubts that Windows 8 will have a big impact on sales. CEO Paul Otellini said last week that he's "very excited" about the new operating system but expects the usual holiday bounce in PC sales to be half of what it usually is. Clearly, PC makers are being cautious about building big stocks of Windows 8 PCs.

Research firm IHS iSuppli expects the industry to ship 349 million PCs this year, down 1 percent from last year's all-time high. Although small, the decline would be the first since 2001. In the US, a mature market where consumers are gobbling up tablets, PC sales have already been declining for two years.

Meanwhile, Apple has been doubling sales of iPad tablets every year since the first model was introduced in 2010. From April to June, Apple shipped 17 million iPads, while HP, then the world's largest maker of PCs, shipped 13.6 million PCs, according to Gartner analysts.

Smartphones, which were a niche market before the 2007 launch of the iPhone, outsold PCs last year, even though PC sales were at a record high.

Windows 8, a response to the popularity of tablets, is the biggest revision of Microsoft's operating system since it introduced Windows 95 amid great fanfare 17 years ago.

The new system is getting a completely different look that will force users to learn new ways to get things done. Microsoft doesn't plan to cushion the impact as it says the radical new look is designed to be easy to use on a touch screen. Computer companies will make Windows 8 standard on practically all PCs that are sold to consumers.

Speaking to Wall Street analysts last week, Microsoft's Chief Financial Officer Peter Klein said he isn't very concerned that user confusion could slow the adoption of Windows 8. When Microsoft introduces new features, he said, people eventually realize that "those innovations have delivered way more value, way more productivity and way better usability." That's going to be true of Windows 8 too, he said.

But Raluca Budiu, a user experience specialist with Nielsen Norman Group, believes the transition to Windows 8 will be most difficult for PC users, because Microsoft's design choices favor touch screens rather than mice and keyboards.


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