The outlook for Microsoft in the client computing world is grim, with the high-end pricing for the Surface and Windows 8 machines likely to allow Apple to continue to steal a march on the software giant.
That is the view of Canalys, which today releases a buoyant-looking set of numbers for the worldwide PC market in Q2. The market watcher includes tablets as part of its market data, and the tactile devices were the key driver in total client shipments growing 11.7 per cent annually to 108.7 million. EMEA proved the market's fastest-growing region, with unit volumes spiking 17.3 per cent to 30.7 million.
Canalys notes that "in contrast to [tablets], Windows PC shipments continued to disappoint" in Q2. The dawn of the ultrabook has failed to ignite the market as hoped, with pricing yet to reach a point that will entice consumers in their droves, notes the analyst.
The share of the client market accounted for by Windows devices fell to an all-time low of 73 per cent last quarter, while Intel's share fell below 70 per cent for the first time.
Meanwhile, the giddy growth of the tablet market still shows no signs of plateauing, with shipments rising 75 per cent annually in the quarter. The new iPad was picked out as the key growth engine – for both tablets and the market as a whole – but Samsung and Asus also fared well, said Canalys. The Korean electronics giant more than doubled its shipments of its Galaxy Tab line of devices.
Canalys paints a bleak picture of the outlook for Microsoft, suggesting that the launch of Windows 8 will be unable to stop the vendor's market share continuing to decline until 2013's third quarter at the earliest. The onus on end users to buy high-end touchscreen devices to get the most out of the operating system will ensure pricing remains prohibitively high, claimed the analyst.
Microsoft has been urged to combat this by subsidising the production costs of its OEM partners to the tune of $50 (£32) to $100 per unit, in a similar way to which Intel backed ultrabook hardware makers with $300m of funding last summer.
Price is also expected to be a barrier to success for the Surface (pictured), with Canalys analyst Tim Coulling damning the device with faint praise by comparing it to Microsoft's failed attempts to make waves in the MP3 player market.
"The information available to date suggests the prices of both will be too high to capture significant market share, and a direct sales approach will prove inadequate," he said. "We expect the Surface pads to have a similar impact on the PC industry as the Zune did in portable music players."
Canalys also counsels the major PC vendors to hold fire on development of Windows tablets "until Microsoft rethinks the high licence fee".
Chris Jones, the market watcher's principal analyst, added: "Microsoft has upset some partners by bringing its own hardware to market. Marketing, distributing and servicing such hardware profitably is hard. Once the Surface makes a material dent in Microsoft's P&L, it will need to repair relationships with PC vendors, who are already preparing lists of demands."
Top of the tree
Apple reclaimed the title of the world's leading client hardware vendor in Q2, after growing shipments a stonking 59.6 per cent to more than 21 million. The vendor has seen its market share grow nigh on six points to 19.4 per cent in the past year.
HP, now in second, is feeling pressure from above and below. The US firm saw its shipments drop 11.3 per cent in Q2, while market share has slumped more than three points since the corresponding period last year and now stands at 12.5 per cent. Hot on its heels is Lenovo, which now has a 12.1 per cent market share after posting 27 per cent year-on-year shipment growth in Q2.
Fourth-placed Acer, with 9.8 per cent market share, continues its low-key recovery, following an annus horribilis in 2011. The Taiwanese outfit shipped 10.7 million units in Q2, up 4.3 per on last year.
Dell continued to lose ground during the quarter, with shipments down 10.9 per cent to 9.65 million. The Texan outfit's market share has slumped from 11.1 to 8.9 per cent in the past 12 months.
Canalys research analyst Tom Evans concluded: "Reports that poor economic conditions and the wait for Windows 8 hurt the PC industry this quarter do not tell the whole story. The PC industry is performing well and 2012 is shaping up to be a record year. Vendors with innovative products will reap the rewards."
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