M$ is big and has some inertia but it is well past its prime in terms of shaping markets. The sectors that it locked in solidly, retailers and OEMs of PCs, are still pretty well locked in but the growth has gone. While Moore’s Law has made the price/performance of integrated circuits plummet, there’s just too much hardware in a PC made the old way: huge batteries/PSU, case, and wasted space between bulky drives. ARMed devices are able to be built for less and give most users of PCs what they want plus extraordinary mobility and M$’s OS does not run on them, yet.
In their latest annual report, M$ showed its delusions:
“The Windows operating system faces competition from various commercial software products offered by well-established companies, mainly Apple and Google. The Windows operating system also faces competition from alternative platforms and devices that may reduce demand for PCs. User and usage volumes on mobile devices are increasing worldwide relative to the PC. We believe Windows competes effectively by giving customers choice, flexibility, security, a familiar and easy-to-use interface, compatibility with a broad range of hardware and software applications, and the largest support network for any operating system.”
M$ is not in touch with reality. It’s not so much software that’s competing with their software but hardware+software systems from others that are smaller, just as useful, and costing less to build, ship, and to buy. A PC with Wintel inside starts at nearly $200 just for the CPU and OS. The cost of making an ARMed smart thingy is in the range of $100 to $200, complete. That’s not a sustainable difference for the use many people make of personal computers. To the OEMs, the additional cost of hard drives, RAM, PSU, optical drives and case and higher shipping costs mean that the future is going to small cheap computers not running Wintel.
Further, there are about 1500 x86/amd64 PCs in the world today. Each year about 450million new ones are shipped. That’s how many smart phones ship in a year and the growth rate is 60%. There could be 2000 ARMed smart thingies running Android/Linux or GNU/Linux in less than two years and in four years, almost everyone on Earth may have one. Apple has a good share now but has already lost the lead to Android/Linux. The smart phones can be had for less than $100 now, doubling and redoubling the market for them.
The same will happen with tablets. A small, number about 60million will be shipped in 2011 but in 2012, the number could increase dramatically, about 300%. That means when “8″ is released, the installed base of GNU/Linux or Android/Linux or iPad tablets could be about 200 million. OEMs are not going to shift to the “tight margin” model that M$ imposes on PCs in the smart thingies. The newcomers will be making more than M$’s partners on small cheap computers than on “PCs”. By the end of 2012, consumers and businesses will know and love the small cheap computer and will turn up their noses at M$ offering small expensive computers.
No. M$ is deluded. They are giving a middle-distance runner a lead of at least one lap. M$ may be able to sustain considerable income but the growth is gone forever and we could be seeing the peak of their client OS in terms of units sold and revenue. They are looking at near-zero growth and the new technology is seeing multiples of 100% growth.