Microsoft, Google, and Apple: Which one faces doom in 2017?

Microsoft, Google, and Apple: Which one faces doom in 2017?

Summary: Last week, Gartner released a report that had tech bloggers falling over themselves to declare Microsoft obsolete and the PC dead. Two problems. First, it's Gartner. And second, a closer look at the data paints a surprisingly rosy picture for Microsoft.

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Here we go again.

Last week Gartner released yet another report containing long-term predictions. This one laid out what the analyst firm believes the market for computing devices will look like in 2017.

And tech pundits have run with it, churning out one sensational headline after another: Microsoft will be obsolete, its influence is fading fast, it is sliding into irrelevance. And my favorite, “Gartner May Be Too Scared To Say It, But the PC Is Dead.” One could write a pretty good parody of the Monty Python “dead parrot” sketch just using the headlines.

There are two problems with what happened last week.

First, it’s Gartner, which has a track record of being spectacularly wrong with its predictions. Like the time in 2006 (and no, that is not a typo) when Gartner asserted that Apple’s only path to success was to quit the hardware business completely and license the Mac to Dell. Or the rolling forecasts in 2009 that started with Gartner projecting the “sharpest unit decline in history” and ended up with a report of “the strongest growth rate [in PC shipments] in seven years.”

Now, in fairness to the analysts who wrote this report, I think they have identified some likely trends. Sadly, those genuine insights are getting lost because they’re surrounded by tables full of numbers that are so specific as to be ludicrous.

But even if you take their numbers at face value, you need to actually understand them. With a few exceptions, most of the quick-and-dirty rewrites of Gartner’s press release got the story exactly wrong.

And that’s the second problem. All those reports focused on one shiny thing and ignored everything else in the report. Here, I’ve used my virtual yellow magic marker so you can see Gartner’s data as superficially as all those bloggers did:

ww-device-shipments-2012-17-gartner-620px

Right. The market for conventional desktop and notebook PCs is declining, because people increasingly value mobility in the devices they use to perform basic computing tasks. So, Gartner predicts a 20 percent decline in demand for big, desk-bound PCs and conventional notebooks, most of which are heavy devices that remain on a desktop full time.

But what’s that line right below the highlighted one? What’s an Ultramobile?

The good folks at Gartner helpfully defined the term for CNET last summer:

Gartner describes the combination of ultrabooks and the MacBook Air as "ultramobile notebooks." Typically, ultramobile laptops are under 3.5 pounds and less than 0.8-inches thick.

Via email, a Gartner spokesperson confirmed that devices in this category "retain full PC capabilities." These are lightweight PCs, typically with keyboards and trackpads, powered by the same operating systems used on those heavier desktop and conventional notebook models. Microsoft’s two-pound Surface Pro is a perfect example of this type of lightweight PC/tablet. So are hybrid Windows 8 devices like HP’s Envy X2, Samsung’s 500T and 700T, and even Dell’s 3.3-pound convertible XPS 12. Ultrabooks and MacBook Airs, which are the equivalent of PCs and MacBook Pros in every dimension except weight and thickness, are counted in that line too. In other words, some PCs are getting considerably lighter, but they’re still PCs.

So let’s redo Gartner’s numbers, this time combining the PC and Ultramobile lines.

pcs-and-ultramobiles-2017-gartner-apr2013-620px

Wow, that’s a completely different story. Large, heavy, general-purpose PCs are becoming less popular, but demand for lightweight devices that can still function as general-purpose PCs is soaring. If you do the math, you’ll see that the increase is projected to be about 881 percent from 2012 to 2017. That phenomenal growth rate in the Ultramobile category means that overall, the number of shipments of devices running desktop operating systems (like Windows and OS X and even Chrome OS) will probably increase by 5 percent between 2012 and 2017.

At an average of about 340 million devices per year, that means roughly 1.7 billion new PCs (including 250 million or so in the Ultramobile category) will reach the market between 2013 and 2017, also known as the Windows 8 era. Not exactly a dead category.

If you trust the numbers, that is, which is a pretty big if.

(A side note from that CNET story: Last July Gartner said it expected about 10.7 million ultramobile units to ship in 2012. Gartner’s final tally for the year was 9.8 million, more than 8 percent lower than its projection just six months earlier. Likewise, last July they projected that the number of ultramobiles shipped in 2013 would be “about 17 million.” Nine months later, they’ve revised that projection upwards to 23.6 million, a change of about 39 percent in just nine months. Think about that before you get too transfixed by the detailed projections for 2014 and 2017.)

And what about that "obsolete,” “irrelevant,” “fading fast” Microsoft?

Well, again, if you trust in Gartner’s numbers enough to write a “Microsoft is doomed” blog post, you really need to look at all the numbers. Here, let me help.

os-families-2017-gartner-apr2013-620px

[Data from Table 2 in this report, with RIM's tiny numbers added to the much larger "Other" category. I added percentages and trendlines.]

Wait, what? That same Gartner report says that Microsoft will struggle in 2013 and 2014 but then will dramatically increase its share of the overall market by 2017?

Exactly. Here’s what Gartner said in their summary press release:

In the shares of operating systems (OSs) in device sales, the shift to mobile and the fight for the third ecosystem becomes more evident. Android continues to be the dominant OS in the device market, buoyed by strong growth in the smartphone market (see Table 2). Competition for the second spot will be between Apple's iOS/Mac OS and Microsoft Windows.

I think that sounds about right.

Apple isn’t interested in winning market share at any costs. They want the high-margin customers. Microsoft is doing its best to build new-format devices that can work well in corporate environments where management is important. Android and Windows are both fighting aggressively to win share in emerging markets. The real loser is “Other.”

And before you start high-fiving Google over their complete dominance, it’s worth noting that Google’s direct share of the Android ecosystem might be a lot smaller than either of its two rivals. As my colleague Jason Perlow pointed out last week, the open nature of Android is a great blessing and an even greater curse for Google. Samsung, the largest maker of Android devices in the world, “will diverge from Google's OS and become a legitimate fork.” So will Amazon.

ZTE, Lenovo, and Huawei service primarily a domentic market in China, and will run their own weird domestic builds of Android with state-approved social networking software to keep the Chinese government happy...

This leaves us with no less than four, five, or six distinct forks of Android. Google as represented on Nexuses or Google Experience devices; Amazon; Samsung; HTC/Facebook; and whatever weird beast ends up running for domestic Chinese use. And BlackBerry 10's Dalvik implementation.

If you strip away the sensational headlines, the real story is pretty prosaic. The worldwide market for computing devices is changing rapidly, and three ecosystems (one of which is highly fragmented) have excellent prospects of becoming large enough to be taken seriously over the next five years.

Unless things change, which they always do.

Now go ahead and spin a clickbait headline out of that story. I dare you.

Topics: Microsoft, Apple, Google, Mobile OS, Smartphones, Tablets, PCs

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291 comments
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  • Microsoft jumped the shark with the Surface

    I guess what you're saying, Ed, is that Microsoft "jumped the shark" with the Surface RT/Pro--because now is not the proper time for a (half-baked) convergence device. Consequently you've made it clear to me that Microsoft faces certain doom in 2017.
    dogbreath1
    • Wow

      You tried and failed hard. Bravo.
      Jeff Kibuule
      • So did Microsoft

        With Windows 8 and Surface, but I wouldn’t tell them “bravo” though :)
        mil7
        • Really?

          If you'd paid attention to Windows sales over the years, you'd know that Windows 8 isn't exactly a failure.
          Michael Alan Goff
          • That is an old joke

            You mean the 60m licenses that once upon where force fed to OEMs and most of them are converted to Window 7? That is an old joke, do you have a new one?
            mil7
          • Have any figures to back that claim

            Nope you don't. In any case, even if they are converted into Win7 licenses, it doesn't exactly spell doom for Microsoft, as that company happens to get the money either way.
            sjaak327
          • Hold on a sec

            A company is betting the farm on a new strategy which most of their OEMs (as the rest of the world too) are ignoring and you see no problem with that?

            Yes they do get their money from Windows 7, that is the license money, by no means though it covers the investment they have made or helps them convince anybody that this is really the future.
            mil7
          • Right now they are ignoring it because it doesn't pay the bills.

            So they should not put all their eggs in that basket.

            One or two maybe, just nothing to bet the farm on.
            jessepollard
          • re: Hold on a sec

            I'm sure your boss wouldn't like it that you are wasting time bashing Microsoft on ZDNet, while sitting at your Windows PC.
            ...just like EVERYONE else in the country that has a job.

            You crack me up. :-)
            TNrider
          • Assumptions:

            1. I have a boss
            2. I am using a computer running Windows
            3. I am doing that during work hours (or lunchtime)
            4. You are funny

            You got 3 out of 4 correct, but you are not funny.
            mil7
          • Aw, shucks,

            it is a little funny.
            bigsteve666
          • hmmm

            So he's right.....pretty funny actually.
            Stormborn
          • He forgot others mi7

            5. you have no job
            6. you are unemployable
            7. you spend all of your time online MSFT bashing
            8. you are 40 and still live with your Mom.
            xuniL_z
          • You...

            are assuming he has a job.....
            Stormborn
          • "by no means though it covers the investment they have made or helps them"

            Hmm... do people pay for windows 7 with some type of magic currency that is not valid in today's world? Cuz in my book, money is money.
            mrefuman
          • Haters gonna hate

            Microsoft hasn't bet the farm on Windows 8.
            it retains very high backwards compatibility while adding a new interface. It is not their strategy to dump the desktop as that would kill off their number 1 cash cow, Office.
            Microsoft does enterprise solutions better than anybody. The enterprise is their farm.
            warboat
  • Commercial Linux OS, but no Commercial Apps!

    John, What do you consider to be a full high end commercial & professional grade application that would persuade me to move my business to Linux?
    I have searched to keep my options open, but only find those suitable for home & average amateur use in the libraries.

    Until then Linux will be all dressed up with nowhere to go.

    The option of Google Doc's does not work us either with the immaturity of the cloud (applies to Office 365 too to be fair!).
    Nitramd
    • Commercial and Professional grade applications?

      Google has no problem with providing applications for Linux and Windows. So does Firefox, Opera and many other companies. Because it's not being done right now with some companies does not make it an impossibility. Any Google Linux application runs, performs and looks exactly like the sister Windows applications.

      Unfortunately for Microsoft, instead of defining core Windows attributes and security, many people are defending Windows by the number of 3rd party applications written for it. That's using some external value to prop up Windows legitimacy, something that has no basis in Windows attributes. It's, unfortunately, come down to that level for Microsoft.

      In some way's it's like saying Ford is king because refiners only make gas for a Ford. Therefore Ford is great, and no one can compare to Ford. Using externally produced software to define Windows stature is not saying anything much about the attributes of the OS.

      Once global acknowledgement of a Linux market is sensed, present Windows software will be made available to Linux users. After all, there is no limiting factor in Linux that would prevent the use of that software. ActiveX and other proprietary Microsoft lock-ins only serve to increase revenue and the Microsoft monopoly and history has shown they can easy be circumvented.

      This transition will be promulgated by leading edge companies and others will most certainly follow.
      Joe.Smetona
      • Worst Analogy Ever

        Sorry, don't work here. Part of Windows value is the huge number of apps written for it, just as that is part of the value of iOS and Android, especially when compared to Windows Phone or Windows RT.
        AudeKhatru
    • Supporting Enterprise Software.

      I supported engineering and CAD software for five years, with over 4,500 answered calls. A small number of calls dealt with anomalies in our software, but the major portion of the work was to babysit and correct Windows deficiencies, driver, MDAC, maintenance and malware issues.

      These issues were Windows specific and if Linux was the OS used, this extra burden would easily be eliminated. Software companies could realize substantial savings just by providing a Linux version of their software. I've run CAD programs on Linux and they work much better. Even Windows CAD programs run better when using WINE.
      Joe.Smetona