Is Microsoft Ready for a Turnaround?

Taiwanese PC makers seem to think there’s hope yet for Microsoft’s (NASDAQ:MSFT) Windows 8, and they ought to know since they are pretty heavily invested in the software.

Recently, Microsoft decided it would make some changes to its latest PC operating system, Windows 8, which was designed to blur the line between PCs and tablets. Windows 8 was optimized for touchscreens, which many PCs don’t feature. However, this did allow the platform to give rise to a breed of hybrid tablets that run a full PC operating system while also having the portability of a tablet.

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Unfortunately, the new operating system didn’t go over so well for Microsoft. With the PC market declining, and fierce competition from Apple’s (NASDAQ:AAPL) tablets — and even its Macs, which managed to defy the PC market decline with an increase in sales last January — and other devices running Google’s (NASDAQ:GOOG) Android, Microsoft was running into trouble on all sides.

Many complaints were brought up about Windows 8 specifically because it was a major departure from previous Windows iterations, and many long-time PC users didn’t quite feel at home with the operating system. Now it seems like Microsoft will be taking a step back in its design to address that issue, which could help the sales of Windows 8-based devices, including hybrid tablets.

The move by Microsoft should please original equipment manufacturers, like Acer and Asustek. Executives at Acer, based in Taiwan, had complained about Microsoft’s strategy with Windows 8, but now says the company is doing more to listen to the suggestions of OEMs, calling Microsoft more “considerate.” Acer President Jim Wong addressed some of the issues with Microsoft’s new operating system, saying, “although touch makes a lot of possibilities for PCs, you need to take care of the rest of the world that doesn’t need touch.” This suggested that Microsoft was so focused on breaking into the tablet sphere that it might have forgotten about traditional PC customers and values.

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According to Gartner analyst Tracy Tsai, one other problem that Microsoft is having is that it doesn’t have enough apps. As it tries to enter the tablet market and compete with Apple and Google, it has to find a way to measure up to them in terms of apps. Though tablets running Windows 8 could run a whole slew of full-blown programs — as opposed to apps — the integration between smartphones and tablets wouldn’t be as seamless as it is between iOS smartphones and tablets or Android smartphones and tablets.

The changes Microsoft does decide to make could have a significant impact on the competition. Soon, the new operating system could be coming to tablets in the 7-inch form factor, to compete with Apple’s iPad Mini and the Nexus 7. Though it does have the lack of apps, the full operating system still features unique advantages over other tablets, and they could soon be coming at lower prices — even below $300, according to Asustek Chief Executive Officer Jerry Shen.

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Now, its just a matter of seeing whether Microsoft’s changes to Windows 8 will be able to boost performance in PC market without risking failure in the tablet market, or vice versa.

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