Does Windows Have One Foot In The Grave?

Does Windows' dropping web market share mean that Windows is dying? Fifteen years ago Microsoft's Windows operating system reigned supreme in the computer world. Windows enjoyed near ubiquity in both the business and consumer computing markets. Challengers to Microsoft's hegemony were few and paltry. Apple, Microsoft's perennial rival, was in dire straits. Steve Jobs had only just returned to the company, which was had a long, hard road ahead on its return to profitability. In fact, it was largely through Microsoft's aid that Apple survived, thanks to the release of Microsoft Office for Mac and Microsoft's purchase of $150 million in non-voting Apple stock. Thanks to Windows, Microsoft's supremacy in the computing industry was virtually unassailable, and remained so for many years. Now, however, though Microsoft itself remains strong, there are indications that the Windows platform may be in decline. First, we have the fact that Windows revenue dropped 6% in the last quarter to $4.74 billion. During the same quarter Microsoft as a whole saw a revenue increase of 5% (to $20.89 billion). The Entertainment & Devices Division, responsible for the Xbox 360, grew 15% to $4.24 billion, and the Online Services Division (responsible for Bing) grew 10% to generate $784 million. So, in a quarter when Microsoft as a whole, and virtually every division within Microsoft, saw significant revenue growth, Windows declined. Meanwhile, Apple has seen enormous growth during the same time that Windows has declined. While Windows declined 5% in the last quarter, the revenue generated by OS X grew 5% during the same quarter, and grew an amazing 22% over the previous year. What's more, Apple's company-wide revenue in the last quarter was more than double that of Microsoft during the same period. While Microsoft generated $20.89 billion in revenue, Apple generated a staggering $46.33 billion. That's not all, though. A recent study by Chikita has found that the Windows operating system's web browsing market share has dropped by nearly 7% in the last six months. In August of 2011 Microsoft's web browsing market share was 78.3%. As of February it has dropped to 71.4%. Yet, the news for Windows may not be all bad. Windows 8 was unveiled in June of 2011. As more information has become available, impressions of the new operating system have been generally positive. In addition to a new logo, Windows 8 will be getting Microsoft's slick new Metro user interface. The paned interface was designed to unify the user experience across Microsoft's products -- smartphone, tablet, Xbox 360, and PC. Xbox 360 users got a taste of what Metro will look like when the Xbox Live dashboard got an update in December. It's entirely possible that a good showing from Windows 8 would reverse the apparent downward slide that Windows is suffering right now. There may be more good news for Windows, of a sort. While Windows revenue is down, that may not be the only explanation for the decrease in web market. Another recent study by Chitika showed that Apple's Mac OS X also lost web market share during the same period. What makes the study interesting is that it lost that market share not to another computer, but to Apple's own iOS mobile platform. From August to February OS X and iOS almost perfectly mirrored each others' changes in web market share, with iOS finishing just slightly higher than OS X. There is other evidence that the rise of mobile devices may be behind the decline of Windows. Recall from above that Apple made over twice as much in revenue as Microsoft in the last quarter. What is most remarkable is the role of Apple's iPhone in that figure. Well over half of Apple's $46.33 billion in revenue came from the iPhone. All by itself, the iPhone generated $24.4 billion in revenue, beating all the rest of Apple's business combined by $2.47 billion, and beating all of Microsoft by over $3 billion. At the same time, it also came to light recently that Apple sold more iOS devices in the past year than Macs in the past 28 years. Apple's iOS platform is not the only mobile culprit. Google's Android OS currently holds half of the global smartphone market, and recently overtook iOS to become the most popular smartphone platform in the UK. At the same time, Google appears to be eyeing a jump to the desktop/laptop market for its Android operating system and a possible convergence of the Android and Chrome operating systems. Making Google a potentially significant competitor for both Windows and Apple. Yet Windows may not be on the way out quite yet, at least not in the way it might seem. While Windows revenue is down, and its web market share is down, it may be that the primary culprit is mobile devices. For many smartphone and tablet users, their mobile devices have nearly replaced their computers as their primary means of surfing the internet. So while Windows may be in a bit of a rut, it may not be as bad as things look at first glance.