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Opinion: Microsoft should make its own Windows 8 PCs

Nicole Kobie

By Nicole Kobie

Posted on 3 Jan 2012 at 10:34

The PC world is stumbling, and if it falls it’s going to bring Microsoft tumbling down with it. But there’s a solution: it’s time for Microsoft to start making PCs.

The tech world is moving towards tablets and apps, and that could cause trouble for Microsoft in the long run. At the moment, more than nine in ten computers run Windows, but sales of PCs are essentially flat, while sales of smartphones, tablets and Macs are skyrocketing, posting growth well above traditional PCs for 22 consecutive quarters.

That all adds up to a stagnating market for Microsoft’s core software business, and it’s already starting to show, with its latest round of results showing weak PC sales were hurting Windows. Microsoft must do something.

Microsoft stated at the launch of Windows 8 that every device should have a touchscreen – what better way to push that vision than to make touch laptops and all-in-ones itself?

Intel already is. After failing to convince tablet and smartphone makers to use its Atom chips, Intel doled out $300 million to encourage manufacturers to create Ultrabooks – essentially, a PC version of Apple’s MacBook Air – to draw consumer attention away from the Apple Store. PCs have become commoditised appliances, and nobody lines up to buy toasters (until Apple releases the iToast, that is).

While cheap, boring PCs certainly have their place, their tight profit margins mean that manufacturers also need to compete at the high-end of the market to remain in the black. And who better to do that than Microsoft?

While starting a PC business might seem insane given the state of the market, Microsoft isn’t starting from scratch. It already has a hugely successful PC hardware business in the form of the Xbox – which is a PC in all but name. Yes, there were “red ring of death” issues early on, but that bit of hardware has helped the entertainment division contribute $9 billion in quarterly revenue, and proves the public will happily buy made-by-Microsoft kit.

If Microsoft can’t ramp up its own manufacturing plant, it doesn’t have to. Microsoft’s latest round of results show it’s sitting on a $57 billion mountain of cash. It could easily buy a PC maker; it might even be enough to tempt HP to change its mind about selling its PC business.

Regardless of how it’s made, a Microsoft PC has the potential to anger existing partners. But what’s Dell or Asus going to do: start running Ubuntu instead? Lovely as the Linux OS has become, OEMs are as locked into Windows as they’ve ever been. As long as Microsoft plays nicely with licensing fees, there’s no reason why they should lose out – quite the opposite if it drives consumer spending back to the PC market.

The vertical integration that works for Apple may not work for Microsoft, but it’s worth noting that Google certainly looks keen to follow the Mac-maker’s lead. First, there’s Google’s surprise purchase of Motorola, giving the web firm its own smartphones and tablets. And while its Chromebooks are made by Samsung and Acer, they are heavily Google-branded, and are being pitched to consumers in “Chromezone” pop-up shops, the first of which set up in a PC World around the corner from PC Pro’s offices.

Perhaps surprisingly, given the move to online shopping, retail stores are critical to Apple’s success. According to a retail report, Apple Stores are some of the most successful retail premises in the US, selling $5,626 per square foot annually – more than posh jewellers Tiffany & Co. Microsoft stores already exist; it’s time they had a bit more on the shelves.

Plus, as Microsoft stated at the launch of Windows 8, it believes every device should have a touchscreen – what better way to push that vision than to make touch laptops and all-in-ones itself? Apple defined the tablet market with the iPad; Microsoft could very well do the same with touch PCs.

This year's arrival of Windows 8 gives Microsoft the perfect opportunity to break into the hardware market. Instead of unveiling the new OS on a Dell, Asus or Acer, imagine if Microsoft unveiled the new OS perfectly optimised on its own slick Ultrabook, tablet or all-in-one PC. Is it too fantastic to picture people queuing around the corner to get into the Microsoft Store?

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User comments

No touch

And no Microsoft PCs.

Pushing the Microsoft Signature programme further, by contracting certain manufacturers to build an MS branded "experience", similar to their current Signature experience might work - Signature is pretty much the same as Google's Android and the Nexus range of devices.

As to touch, no thank you. I have two 24" monitors on my desk and they are both out of arms reach. I don't want to spend my whole daying bobbing up and down, every time I have to move the cursor! Although it would probably do my weight problem a world of good! :-D

By big_D on 3 Jan 2012

Monopolisation problem?

I would hazard a guess that Microsoft wouldn't be allowed to purchase a PC manufacturer. Due to the size of the company, certainly within the EU it would be highly unlikely to be granted the right to control that much of a single market.

Bear in mind even Apple is being investigated by the EU due to the exclusivity and integration of their music store into all their products due to a strangle-hold monopoly. So for now I seriously doubt Microsoft are in a position to build PC's.

The one potential business venture would be to further expand on the Xbox line. This is of course starting to be seen to be happening with the Xbox becoming more media-centre friendly in addition to console gaming. I would not be at all surprised to see the next generation of Xbox running Windows 8 and including TV tuners.

By skarlock on 3 Jan 2012

News?

Shouldn't this be in the 'Blogs' section - or wont they let you have one, Nicole?

By greemble on 3 Jan 2012

Blog.

http://www.pcpro.co.uk/blogs/author/nicolekobie/

EOF

By synaptic_fire on 3 Jan 2012

Oh No they won't! (Oh yes they will!)

MS already has a manufacturing 'partner' who can design and build 'signature' products for its 'phone and Tablet OS's.

Admittedly NOKIA's original offering has not really set the world alight. But this is (hopefully) a consequence of the incredibly short timescale involved in delivering a 'phone in 2011, not a lack of competence.

NOKIA needs to deliver two products next year, and quickly. First a really bleeding-edge WP7\8 handset with a big 'Retina'-quality (or better) display, LTE, superfast CPU, two hi-res cameras . This should all be presented in a really attractive case with a 'quality' feel, and sell as a 'Premium' product, but at iPhone prices....

Secondly NOKIA needs to deliver a really brilliant 10" Tablet running Windows 8. Superfast ultra high-res graphics should be the starting-point, with an attractive high-quality case as the other priority. This should be marketed as a truly 'de-luxe' product.


These two devices should (like the Google Nexus) establish the benchmark for products from other partners, thereby 'pulling-up' the overall image of the brand.

Of course we shouldn't forget the BRIC (emerging economies) countries. MS\NOKIA seem to have targeted these as potential markets for WP7, with NOKIA producing cheaper (but good quality) handsets targeted at these markets. This is a great strategy - ask the Jesuits about getting people hooked young....

By wittgenfrog on 3 Jan 2012

@wittgenfrog

The problem is, the display must have a resolution of 800x480. Unless they miniturise the device, they won't reach Retina dpi.

The new Windows Phone 7 devices have some of the fastest CPUs on the market - but only single core, because WP7 doesn't use and doesn't (currently) need dual core.

By big_D on 3 Jan 2012

Is it really either/or?

I don't think tablets replace PCs in terms of the jobs they do: So those flat PC sales are the PC ecosystem - and PC users with PC style jobs to do - ticking away very nicely. In raw volume, there will be lots more smartphone sales because the life-cycle of a smartphone is over in 18 months: PCs last for a decade (according to Steve Jobs). So don't let the numbers lead you astray.

By Steve_Cassidy on 3 Jan 2012

@Steve_Cassidy

I totally agree. I still haven't found a use for a tablet in my life. It certainly couldn't replace my desktop and laptop - and with my smartphone, I don't (currently) see a need for a device between the two.

I can see the tablet eating into the couch surfer market, but in an office, where typing speed (especially touch typing) and displaying large amounts of information etc. are important, I don't see the tablet being able to penetrate.

The PC isn't the best technology for such work, but it is still the best technology we currently have to do that work.

Just like the PDA didn't kill the PC, I don't see the tablet killing it either. They target different markets and different use cases, with some cross-over in the middle.

By big_D on 3 Jan 2012

Oh yes they will...

@Big_D
That's the current WP7 specification . MS are certain to "upgrade" it to suit higher Res displays and multicore CPUs. If only becuase in a short time these two components will be "standard" and cheap as chips...

As to 'needing' multicore CPUs and higher res displays, that's largely marketing, but as anyone who's studied Apple will tell you: Marketing counts!

@Steve Cassidy
Indeed there are no circumstance in which PCs will be replaced by Tablets (or phones) as general-purpose computing devices. The 'phone and the Tablet are either useful adjuncts to the PC, or suited to specific content consumption activities.

Of course as far as MS is concerned, the Wintel Tablets will technically be able to do both couch-potato and general purpose tasks.
Simply add a cm thickness and a few ounces of weight and make a convertible Tablet, or add a dock, mouse, keyboard and optional Screen.
This scenario is being heavily discounted by many pundits, but assuming Intel can produce decently capable Chips, with low power consumption and at a sensible price, then it looks like a no-brainer to me. Such a gadget offers enormous flexiblity both in a "tradititional" office, and in numerous Vertical Markets.
Unlike their darling iPad W8\Intel Tablets will integrate seamlessly into existing corporate infrastructures.

Meanwhile the consumer-oriented ARM W8 combo could offer the iPad serious competition, especially if MS and partners can get their consumer cloud services acts together....

It will prove to be an interesting period

By wittgenfrog on 3 Jan 2012

I totally agree with Nicole.
I don't see that too much that monopoly is a big problem as much as Microsoft truly believes that they are a software company. But I think that they should stop thinking that way and look for what is needed! And that is Microsoft hardware.
building their own hardware will make possible for them know every little specification on each hardware component, which will translate in a even better software experience.
Apple did it and it worked out for them, Microsoft should do the same.
And I wouldn't be surprise if they announce some sort of tablet in the coming months.
Thanks,

By mhweb on 3 Jan 2012

Monopoly

@mhweb
There might be no 'real' monopoly were MS to start producing its own hardware. BUT you can be pretty sure that all the usual suspects would start crying 'foul' straight away.

By wittgenfrog on 4 Jan 2012

Sorry, the basic premis is utter rubbish

"sales of PCs are essentially flat, while sales of smartphones, tablets and Macs are skyrocketing"

Comparing a relatively new market with a mature one is going to cause you to embarrass yourself by making unwarranted predictions as a result of not comparing like to like.

By qpw3141 on 4 Jan 2012

Opinion: Microsoft should make its own Windows 8 PCs Read more: Opinion: Microsoft should make its own Windows 8 PCs | News | PC Pro http://www.pcpro.co.uk/news/371974/opinion-microsoft-should-make-i

no chance-- it would give them to much controll like apple--How long would the openness of the os last, as in my tower pc is my choice of common parts all coexisting happilly

By invalidscreenname on 6 Jan 2012

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