Here's The Size Of The Market Microsoft Is Targeting With Windows 8

desktop laptop tablet shipments 2011 through 2016

Photo: IDC

Microsoft published a massive blog post on Friday about the design philosophy for Windows 8.The short version: Windows 8 is two operating systems in one.

The centrepiece is a new interface, code-named Metro, that was designed for touch screens. Apps are represented as big colourful squares, and it features a system of sliding horizontal and vertical menu screens that was first designed for the ill-fated Zune HD music player, and later adapted to Windows Phone.

Windows 8 will also feature a classic-style desktop interface that looks and works a lot like traditional Windows. (For more details, see SAI’s Windows 8 FAQ.)

The goal is to provide a single operating system that works equally well on all kinds of portable computers — laptops, tablets, or convertible hybrids.

As the blog post puts it:

Instead of carrying around three devices (a phone, a tablet, and a laptop) you carry around just a phone and a Windows PC. A PC that is the best tablet or laptop you have ever used, but with the capabilities of the familiar Windows desktop if you need it. You may choose to carry a tablet, or you may choose a laptop/convertible, but you do not need to carry around both along with your phone.

This is a very smart move.

Microsoft is basically using a single product to target the two fast-growing segments of personal computing — notebooks and tablets — while making the zero-growth desktop PC market a lower priority.

As research from IDC predicts (see chart), nearly all of the growth in the traditional PC market will come from portable PCs, which will grow from 209.4 million sold in 2011 to 361.3 million in 2016. Meanwhile, desktop sales will barely budge, moving from 144 million to 157 million.

In addition, tablet shipments are expected to grow nearly 3x, from 68.7 million last year to 198.2 million by 2016.

Microsoft already dominates the PC market, with Windows still on more than 90% of all personal computers shipped. Including laptops.

By creating an all-in-one operating system, Microsoft hopes to turn this dominance into a significant market share on tablets as well — or at least stop Apple from building an unassailable monopoly there.

What remains to be seen:

  • Will Microsoft be able to build a single OS with a great experience for both kinds of devices? For instance, the Metro interface was designed for touch screens, but how will the experience be when using it with a trackpad or other pointing device? Will switching between desktop and Metro mode be “fast and fluid” as Microsoft promises, or clunky and confusing?
  • Will Microsoft’s hardware partners make compelling two-in-one devices?
  • Will consumers still consider laptop computers at all? This is the biggest difference between Microsoft and Apple. Microsoft believes that consumers want a choice of portable computing devices, and that many will still choose laptops, or convertibles. Apple has been pushing the idea of a “post-PC” world, where consumers look at tablets as their first and only personal computing device, relegating laptops to work-only devices (much like desktops are today).

It’s worth noting that Microsoft seems to be hedging its bets on the “two-in-one” design philosophy. Around the same time as Windows 8, Microsoft will also release an operating system called Windows RT, which will run on tablets that use the ARM-style processors used in the iPad and most tablets today. Windows RT tablets won’t run old Windows apps, and the desktop will be relegated to a very few functions — people will spend the vast majority of their time in the Metro interface.

In other words, if it turns out that consumers really don’t want notebooks, Microsoft has a solution ready to go.

Microsoft is widely expected to release a near-final version of Windows 8 in June, and Windows 8 computers will begin shipping later this fall. Windows RT tablets will begin shipping around the same time, but probably in lower volumes.

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