Tuesday, August 13, 2013

Microsoft's Best Buy-based Windows Stores - Impending Spectacular Failure

In case you've missed the news, Best Buy will open about 600 Windows stores within its stores. In fact some have already opened. [The store in my local Best Buy is expect to open late this month.]


Microsoft Windows Store Inside Best Buy
Microsoft's press photo of a Windows Store inside Best Buy

Microsoft is paying Best Buy a pretty penny to make this happen (see this article for more). It is likely to be one of Microsoft's biggest failures. We all know now that Microsoft had a pretty disappointing Holiday Season in 2012. Well, get ready, this season could be even worse. The problem is that Microsoft is still believing last year's Windows 8 launch rhetoric and doubling down on the very things that caused the problems last year.


Let's face it, the biggest problem is Windows 8


The trade press generally refuses to say this out loud (Microsoft commands tremendous ad money), but the problem was clear within a few weeks of Windows 8 launch. By February, one even had numbers clearly showing that Windows 8 was the problem. (Analysts were careful to say things like Windows 8 was only a part of the problem... but they too receive money [and data] from Microsoft.) The simple truth is that consumers and businesses alike have rejected Windows 8.

This is particularly true for the "Metro" or "Modern UI" that is the touch portion of Windows 8. Windows 8 tablets are expensive failures with very low market share.


Windows 8.1 to the Rescue?


Sorry, but no. What people don't like about Windows 8 is that they keep getting forced to switch back-and-forth between Desktop and "Metro". The most popular post on this blog shows people how to avoid this (essentially by getting rid of as much "Metro" as possible). Windows 8.1 doesn't really fix any of this. Yes, they add a "button" to the screen, but this just sends you the "Metro" start screen. They have even made this worse by moving much of the control panel to "Metro". There is no reason at all to expect Windows 8.1 will be liked any better than Windows 8. Here are two articles about the matter:


Most people do not want touchscreen PCs


I wrote that this was the case back in January. But just today, a brilliant article by Gregg Keizer in Computerworld explores the issue thoroughly. Here are three quotes from the article:
"We forecast that 17% to 18% of all notebooks would have touch this year," Bob O'Donnell, an analyst with IDC, said in an interview Friday, referring to the research firm's own estimates earlier this year. "But that now looks to be too high, to be honest." He said IDC would probably drop its touch estimates to between 10% and 15% of all laptops.
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Touch's premium continues to scare off buyers who have been trained by years of cut-rate PC deals, but the prices themselves are not entirely to blame. Even if the gap between touch and non-touch PCs was significantly smaller, customers would still pass because they don't see much value in having touch on a PC. 
"Touch is just not that compelling for most. There are not that many touch-required apps that people feel they must have," said O'Donnell.
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Currently, IDC expects that total PC shipments in 2013 will be down about 8%. But that estimate was predicated on a stronger second half of the year, which now appears unlikely.

The only thing he doesn't cover is the physical problems with touch: smeared screens and awkward to use (especially on all-in-ones).


PEOPLE DO NOT LIKE WINDOWS RT (could someone tell Microsoft?)


You would think taking a $900,000,000 writedown for it's Surface RT tablet, would cause Microsoft to rethink what it was doing. And you'd think that if all of Microsoft's OEM partners bailed out on the platform (Asus was the last to leave), Microsoft would be even more likely to rethink what it was doing. But no, Microsoft is going to continue full steam ahead:



So What is Microsoft's Solution to its Windows 8/Surface Sales Problems?


Well, open stores in 600 Best Buys. These will be expensive and large. Not a bad idea in itself, but what will they put there? Well, essentially the exact same things Best Buy put there last year. There will be hardware refreshes (i.e. slightly faster, more power efficient Haswell-based computers)... but what has actually changed? They are still running Windows 8.1. They are still pushing touch. The readily accessible computers will all be touch. They will still be expensive relative to tablets. They will also have tablets, but who wants a Windows tablet? They will have refreshed Surface Pros and Surface RTs. Worse, they've hidden away the sorts of non-touch computers that actually did sell last year, on the side, in a less than optimal setting.

It's really hard to imagine a better scenario for spectacular failure.

How can Microsoft not see this coming?

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