Windows the main source of money for Microsoft for so many years.But completely redesigning that Windows and building Windows 8-is it a gamble on Microsoft's part?
Windows is the money tree of Microsoft's empire. Without a significant design overhaul since 1995, the operating system has been essentially printing money for Microsoft. Last year, Windows brought in more than $18 billion in sales and $11.5 billion in profit. On its own, Windows would be big enough to place among the largest 150 U.S. companies by revenue, and its 62% profit margin would rank among the highest in the world.
But there is a problem.Microsoft PC sales are declining. Windows revenue has fallen for two years, and Microsoft is missing out on a rapidly growing tablet market that has begun to replace traditional computer demand. Just a few years ago, Windows ran about 90% of the world's Internet-connected computing devices, according to Net Applications. Now, with the rise of smartphones and tablets, Microsoft's share has fallen to about two-thirds.
Apple alone has sold more than 100 million iPads in just two and a half years. At an event held Tuesday unveiling a new line of iPads, Apple CEO Tim Cook noted that his company shipped more iPads in the second quarter of 2015 than any single PC manufacturer shipped PCs.At this position,Microsoft had two choices: Do something radically different to win the future or risk a slow death by cleaving to its past.
Microsoft picked the first option and created Windows 8. The touch-based operating system works both as a desktop PC and a tablet platform, and it's not hard to imagine Windows 8 running on a dizzying array of other devices, including table tops, wall screens, kitchen monitors and whatever new touchscreen gadgets we will be using in the future.
"This is an absolutely critical product," said Bill Gates, Microsoft's chairman, on a company video blog. "It's key to where personal computing is going."
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