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Thursday, 4 April 2013

Technology: Microsoft threatened as smartphones and tablets rise

Microsoft faces a slide into irrelevance in the next four years unless it can make progress in the smartphone and tablet markets, because the PC market will continue shrinking, warns the research group Gartner.

It says a huge and disruptive shift is underway, in which more and more people will use a tablet as their main computing device, researchers say.That will also see shipments of Android devices dwarf those of Windows PCs and phones by 2017. Microsoft-powered device shipments will almost be at parity with those of Apple iPhones and iPads - the latter a situation not seen since the 1980s.

In a new forecast published on Thursday morning, Gartner says that by 2015 shipments of tablets will outstrip those of conventional PCs such as desktops and notebooks, as Android and Apple's iOS become increasingly dominant in the overall operating system picture. Android in particular will be installed on more than a billion devices shipped in 2014, says Carolina Milanesi, the analyst who led the research.

For Microsoft, income from Windows and Office licences are key to its revenues: per-PC Windows licences generate about 50% of its profits, and Office licences almost all the rest.But while it dominates the PC market, it is a distant third in the smartphone and tablet markets. Latest figures suggest that Windows Phone, its smartphone OS, shipped on about 3% of devices in fourth quarter of 2012, compared to 20% for Apple's iPhone and over 70% for Android - of which 50% connected to Google's servers and 20% were "white box" Android phones in China which do not use Google services.

"Android is going to get to volumes that are three times those of Windows," says Milanesi. "From a consumer perspective, the question becomes: what software do you want to have to get the widest reach on your devices? BlackBerry may say that its QNX software [used as the basis of BB10 on its new phones] can go into cars and phones, but Android is already in fridges. That's the challenge."

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