The PC market has been shrinking rapidly during the past few years and Microsoft is primarily a company that creates products for the PC market. Its Windows operating systems became synonymous with the use of PCs throughout the world but with more and more people preferring to use smartphones and tablets to consume and create content, less people are inclined to investing in a PC. Another problem with the PC is that you are stuck at a place whether you use a computer or a laptop, which is not the case with a smartphone or a tablet. So what is Microsoft doing about the shrinking PC market?
When a market shrinks, there are multiple ways you can save your business. You can diversify and focus on products and services currently in demand. You can add new features to your existing products so that people find them irresistible. You scale your products and services according to various market segments.
There was a time when Microsoft was primarily selling software, presumably whilst using an ecommerce platform like that of FastSpring (https://fastspring.com/solutions/selling-software-online/). Its main sales came from the Windows operating system and MS Office. With the Surface tab it also started dabbling with hardware. Recently there was news of Microsoft launching a new laptop. There was a 5% drop in the wholesale selling of the Windows operating system to PC manufacturers. The saving grace was that the 5% drop was not as slow as the overall drop in the worldwide PC sales.
This Business Insider article lays down a few things the Microsoft CEO Satya Nadella plans to do to not just tackle the shrinking PC market but also regain the position once Microsoft had. During an earnings conference call he threw some light on the various products and diversions Microsoft is focusing on in order to tackle the shrinking PC market.
- By 2018 Microsoft aims to get Windows 10 on 1 billion devices including PCs, laptops, mobile phones and tablets.
- Microsoft Surface did business worth $ 1.35 billion in sales.
- Nadella plans to make Windows 10 more enterprise friendly to make up for the loss of sales in the general PC market. Businesses are still going to use PCs and laptops for quite a few years.
- Microsoft will be encouraging programmers to develop apps for the Windows Store. Companies like Google and Apple make a great portion of their revenue through their app stores.
- The HoloLens category of computers may create another opportunity for Microsoft although currently, it may go the Google Glass way.
Microsoft so far has been slow at adapting according to the rapidly changing world of technology. It couldn’t figure out the Internet. Its browser was more of a hurdle than a facilitator. Ubuntu almost outwitted Windows.
Subscription-based software can open up new opportunities for Microsoft. It has already started doing it with MS Office 365 and there are rumours that the company may also provide Windows 10 on subscription.