Microsoft Corp. (MSFT) spent billions of dollars and more than three years remodeling its flagship product. Now the hard work begins: Getting consumers, software developers and other allies excited about Windows software again.
The software giant on Thursday formally introduced the touch-oriented overhaul of the operating system that powers nine out of every 10 computers in the world and goes on sale Friday. Microsoft's new Windows 8 is widely viewed as a test of whether the PC-era kingpin can become a factor in new-wave mobile devices--not just tablets but convertible devices that can operate in clamshell or slate-style modes.
The new software 'shatters perceptions of what a PC now really is' said Microsoft Chief Executive Steve Ballmer, during an event along a remodeled pier jutting into the Hudson River in New York City. 'We brought together the best of worlds: the PC and the tablet, your work life and play.'
Microsoft says more than 1,000 new computers and tablets have been designed around Windows 8. The company and its allies are counting on Windows 8 to juice computer sales, which have hit their worst patch in more than a decade.
'You haven't had a compelling reason to replace your old PC,' said Michael Dell, chief executive and founder of computer maker Dell Inc. (DELL), in an interview Wednesday. 'Well, I think you just got one.'
But Microsoft and its partners are being careful about setting hopes for a fast sales burst, amid factors such as unknown consumer reaction to the new software and a potential dearth of applications designed for it. Computer maker Acer Inc. (ACEIY, 2353.TW), for example, on Thursday slashed its PC-sales expectations for the fourth quarter, in part blaming the inability to gauge consumer interest in Windows 8.
Tami Reller, the Windows chief marketing officer, said in an interview Wednesday that she expected 'multiple waves' of Windows 8 sales as new computing devices and applications come on line. Ms. Reller declined to say when would be the right time to judge whether Windows 8 is a success, but she said awareness levels for Windows 8 are higher than they were at the same point for Microsoft's 2009 launch of Windows 7.
The next steps for Microsoft include convincing software developers to help fill up a new digital store for Windows 8 apps. Microsoft has declined to reveal the number of touch-oriented apps for the new operating system, but it is believed to number in the thousands compared to hundreds of thousands for mobile devices like Apple Inc.'s (AAPL) iPhones and iPads.
Some popular apps or games on Apple and Google Inc. (GOOG) devices, including Twitter, Electronic Arts Inc.'s (EA) Scrabble and Apple's iTunes, will not be available on the Windows 8 app store initially.
Microsoft officials on Thursday showed off signs of progress, including apps from entertainment guide UrbanSpoon and game maker Cut the Rope. 'Developers are working fast and furiously to stock the shelves,' Mr. Ballmer said at the launch event.
Some companies that announced Windows 8 apps Thursday include Amazon.com Inc. (AMZN), with software for reading electronic books, and Conde Nast Publications, publisher of magazines including 'The New Yorker' and 'Self.'
The scale of Windows 8 'is so significant that we really want to be where the consumer is,' said Bob Sauerberg, president of Conde Nast. But Conde Nast only is offering stripped-down or sample versions of its magazines on Windows 8 for now.
Microsoft's biggest lure to developers is the potential for sales volume. Mr. Ballmer has said he expects nearly 400 million phones, computers and tablets running Windows 8-type software in a year. He has been meeting personally with developers recently to discuss Windows 8 and encourage them to work on apps.
App development is 'the No. 1 thing for us,' said Paul Jacobs, chief executive of Qualcomm Inc. (QCOM), whose chips are included in devices from Dell and Samsung Electronics Co. (SSNHY, 005930.SE) running a variant of the software called Windows RT. 'The app developers have to know that the base will there,' said Mr. Jacobs.
Both Windows 8 and Windows RT will run new applications being developed. But only the former will run earlier Windows programs, creating potential for customer confusion. Microsoft also simultaneously announced its first tablet, the Surface, which will sell for $499 starting Friday. The device runs Windows RT but will later come in Windows 8 models.
Another potential hurdle is a limited supply of touchscreens in the right size. Though suppliers are believed to have enough of the displays in sizes ranging from 10 inches or less, chip partner Intel Corp. (INTC) has been encouraging companies to make computers called Ultrabooks with larger displays. Research firm iSuppli said it will take at least a year to build up manufacturing capacity to fill demand for those products.
Based on discussions with computer-parts manufacturers in Asia, Nomura Securities analyst Rick Sherlund said about 10% of the Windows 8 devices on the market this quarter will be touch, while the rest will be traditional mouse-and-keyboard computers.
There also remain open questions about whether consumers want or will like touchscreens in laptops or desktops--computing devices people aren't accustomed to navigating with their fingers. 'Rather than making the PC better they're making it worse,' said Jakob Nielsen, a computer-usability consultant.
Mr. Dell didn't discloses sales figures, but said the company's pre-sales of Windows 8 computers had a 'high mix' of touchscreen devices.