The launch of Windows 8 later this year will give Microsoft a boost in the media tablet market, making Windows-based machines a viable competitor against Android tablets and the iPad, but the company is still destined to be the No. 3 player through at least 2016, according to new projections from the Gartner research firm this morning.

Gartner says Windows-based tablets should account for 4.1 percent of media tablet sales this year, compared with 61.4 percent for the iPad and 31.9 percent for Android tablets.

Windows is projected to reach 11.8 percent by the end of 2016, still in the third slot behind Android and iPhone.

Microsoft was an early leader in tablet computing, with Windows-based tablets on the market a decade ago, but they didn’t catch on with the mass market in part because Microsoft was focusing on business sales. The iPad has caught on by appealing to consumers first, forcing IT departments to adjust to the changing tastes of employees.

“This poses a big threat to vendors that thought about focusing on the enterprise market who will now have to become appealing to consumers as well,”says analyst Carolina Milanesi, Gartner research vice president, in a news release.

She continues, “This is exactly the same trend that vendors such as RIM had to face in the smartphone market. The difference here is that tablets have been created for consumers first and then relied on an ecosystem of apps and services that make them more manageable in the enterprise. When the deployment will come from the IT department we believe that operating systems such as Windows 8 will have an advantage as long as they are not seen as a compromise in usability for the users.”

Microsoft’s Windows 8 comes with a new tile-based interface designed to work across tablets and traditional computers. It’s slated for release later this year.

Gartner has been more bullish in the past about Windows Phone, the Redmond company’s mobile operating system, projecting last year that it could surpass the iPhone in market share by 2015.

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  • Guest

    I’m glad that Microsoft will stick with this strategy for at least 4 more years. There are many businesses that need the features, applications, and flexibility that one only will get with Windows 8 — not to mention the significant cost savings created by competition in the device manufacturing world. We see $300 tablets next year, running Windows 8, that do everything that competing vertically-integrated tablets costing $600 do, only better.

  • Matt Templon

    You are going to see the Microsoft tablets look at an entirely different market than the iPad or Android tablets. While you may have great consumer electronics in those devices, and can cater them to some business situations, the functionality is just not there for businesses. Microsoft will make up margins on operating systems and software.

    • Guest

      What you mean is that MS, having again underestimated Apple catastrophically and taken THREE YEARS to respond, is now effectively out of the mainstream consumer segment of the tablet market before they even launch. Therefore, like mobile, it’s very likely they will be a niche [tablet] player overall.

      What little support they do receive will probably be in enterprises where backward compatibility for legacy apps and supportability will give MS some following, even though there will be a dearth of Metro apps compared to either Apple or Google.

      So again like mobile, the volume [tablet] market will be split between Apple at the high end (from both a price and margin perspective) and Google in the commodity low price/ low margin category. Leaving MS again with a minor slice of one of the fastest growing markets and margins that are very low compared to historical Windows fees (probably akin to netbook returns or approx. 20% of what MS makes on a regular PC). With tablets sales expected by many to double next year, and some not inconsiderable percentage of those coming at the expense of Windows-based PC (the poorly named “cannibalization effect”), it’s not clear that MS will even recoup enough on tablets to offset what they’re losing on PC defections.

  • Guest

    “I love our strategy. The board loves our strategy”

    – Steve Ballmer

    Microsoft Corporation (MSFT) -NasdaqGS
    30.50 0.60(1.95%) 12:47PM EDT

    • Guest

      Selling 450 million PCs, millions of mobile phones, millions of game consoles, millions of service subscriptions, and now millions of tablets this year? On top of all the business software Microsoft sells, that’s a heck of a lot of profit even after one considers the gifts to local charities.

      I love that strategy. The board loves that strategy.

      • Guest

        Yeah, you’re right. This is actually good news for MS, particulary in a market they helped pioneer for a decade:

        “Gartner says Windows-based tablets should account for 4.1 percent of media tablet sales this year, compared with 61.4 percent for the iPad and 31.9 percent for Android tablets.”


        • Guest

          That’s pretty good: Microsoft makes money from at least 36% of the tablet market, and once Office for iPad is released in August,* make that 100%. I like that strategy.

          * According to people familiar with the matter who declined to speak for this comment

          • Guest

            Yeah, we’ve already established that MS’s most viable option for the future is that of patent troll. Nothing like putting your company’s destiny in the hands of others. And Office for iPad? Seriously? Have you seen ASPs for iPad apps? You think that is going to represent a big money maker for MS? MS is being forced to offer Office for iPad because of the latter’s popularity. It’s the last thing they’d do willingly, since it almostly certainly will cause pricing pressure across the family.

      • Guest

        I can’t believe people are in denial. I see this all around Microsoft. This complacency is what is killing the company. Microsoft is going the Sony/Kodak route and it’s appalling that people take comfort in yesteryear numbers. Don’t get me wrong, the numbers are great but the trajectory is wrong. It’s a slow, slipping curve and you can see it. When the whole ecosystem is converted, there is no business apps and consumerization of IT has already begun. Microsoft needs to wake up…but alas!  

        • Guest

          “No business apps”? Honestly, I’d like to see five Microsoft programs that one can replace with a non-Microsoft product of equal or higher quality for less TCO.

          Too much work? One Microsoft program. Lower TCO. Go.

          • Guest

            I don’t think he’s correct about there being no business apps. But clearly demand is growing for enterprise solutions that approach the user-friendliness, speed, and dare I say beauty we have come to associate more typically with mobile consumer apps. The days of comparatively user-hostile, slow, and ugly  legacy enterprise apps are numbered. Unless MS gets in front of it far faster than they have been, they risk being supplanted by those who fully embrace and promote the new order. And since this new model also comes at what for MS are very low unit prices relative to historical, that’s a real business model challenge. You can see the company trying to embrace it in one fashion, namely outsourcing legacy to the cloud. That’s obviously higher margin for now, but it’s not wheregrowth is long term. MS faces a lot of serious challenges moving forward, none of which they seem particularly well positioned to successfully deal with. 

        • Guest

          Yeah, it was already difficult to understand five years ago. But today, with what’s happened subsequently in mobile and tablets or in the cloud with people like Amazon, you have to wonder how anyone can avoid the obvious: MS is being disrupted by companies that are better run, more agile, and better able to harness innovation. Heck, Apple is now larger, more profitable, and greater than 2x more valuable in part due to taking over the lead in two markets that MS’s had a ten year head start in, and still the company’s executive, board, and what’s left of its defenders are in denial. Kodak is an apt analog.

  • Christopher Budd

    I wonder what the Gartner projections in 2008 for the PC market in 2012 look like.

    Going out to 2016 seems to me to be a true SWAG.

    For all we know, in 2014 someone will go back and make the Dick Tracy watch a viable mobile computing platform that by 2016 sinks the tablet and mobile phone markets.
    Likely? Maybe not. But two years ago people were initially laughing at the iPad (remember the iTampon jokes).

    The only constant is change. That makes me dubious of any projections more than 1 – 2 years out.

    • Guest

      They’re often wrong on details but directionally accurate. Barring some unforseen development like the one you mention, the broad strokes of this estimate seem correct.

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