Microsoft’s platform crown slips

Google is clear winner across devices: Goldman Sachs

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Microsoft’s platform crown slips StatCounter estimates only 1% of the world’s 1.5bn PCs are running Windows 8.
By  Stephen McBride Published  December 16, 2012

Microsoft's dominance of the global operating system market has slipped dramatically due to emergent device categories such as tablets and smartphones, according to a report from Goldman Sachs, which surfaced last week.

The report estimates a 20% share for the Redmond-based software leviathan despite Windows' residence on 97% of the world's computing devices at the turn of the millennium.

The steep decline follows the emergence of tablets and smartphones, both of which have proved to be industry-shapers. IDC expects global smartphone volume to reach 224.5 million units in the fourth quarter of 2012, representing 39.5% year-on-year growth.

The device revolution has seen Google rise to the top with a Goldman-estimated market share of 42% for its multi-flavoured Android OS. Apple claims second place with 24%.

While Goldman believes that Microsoft may gain some ground with the newly released Windows 8, it sees Apple holding its market position until at least 2016.

New Windows business co-chief Tami Reller last month told a room full of delegates at a Credit Suisse conference that 40m licences had been sold for Windows 8, but technology industry researcher StatCounter reported approximately 1% of the world's 1.5bn PCs are running Windows 8 and Reller herself suggested the majority of new sales were upgrades.

This may mean that Windows 8 device adoption is sluggish in a market that suffers already from PC unit sales declines. HP has recently been downgraded by Moody's, partly due to poor performance in that sector.

Competing in the mobile space will be a key attribute of any market survivors, Goldman reported, suggesting the PC market would remain flat in 2013.

"Microsoft faces an uphill battle (though not insurmountable) given it lacks meaningful share in either tablets or smartphones and as such will need to rely on its appeal to knowledge workers to help drive adoption as its complement ecosystem will remain behind the iOS and Android platforms at least over the next six to12 months," the report read.

Microsoft was also late to the tablet market. While noting that Google needed a "credible" tablet to prevent losing overall device OS share, Goldman pointed out Microsoft's current share of this market sits at 2.6% and is set to rise to only 10% by 2016.

However, the Wall Street mainstay raised the possibility of another market upset by Smart TVs, which could either "further entrench current winners" or change the board once again.

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