This Chart Proves Microsoft’s Worst Nightmare Has Come True

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Want to know why Steve Ballmer wakes up in a sweat at night, screaming at the shadows and clutching his hogshead-sized heart? Look at this chart of year-over-year growth rates of Windows PCs since the iPad came out, put together by the ever nuanced Horace Dediu at Asymco. When the iPad debuted, it immediately killed the PC industry as we know it.

In fact, as Dediu makes clear later in his analysis, Microsoft’s doing so poorly in the PC market right now that even though the Surface was a flop, it’s still accounting for a third of all Windows revenues. Absolutely mind boggling.

  • bdkennedy

    In the next few years we will see them close campuses and lay people off

  • LTMP

    In the next few years we will see them close campuses and lay people off

    Sadly, I think that is true.

  • chris2618

    Look at the source. This page takes so much out of context no wonder if came to this conclusion. I could actually say that the Ipad is eating to IMac sales if i wanted to

  • daov2a

    It’s almost as if John Brownlee did not even read the report. The author is clear in pointing out that Microsoft’s revenues have shifted to now 30% coming directly from their own product (Surface RT/Pro) and in no way does this report state the Surface is a failure. Nor does it state that Windows/Office in general is sufferring. This report is clearly indicating the bite that tablets are taking out of the desktop/PC market share/sales.

    The real take away from this very limited report is that overall PC sales are in major decline but Microsoft has diversified their revenue stream to account for it and “it appears to be working” to the tune of $1.4 billion. That is not too shabby. Microsoft has seen that they cannot depend on the OEMs any longer for revenue as they are, in the great majority, making bad or lackluster products.

    I own a number of electronics (Apple, Android and Microsoft) and the Surface Pro is definitely not a failure as a machine nor is it a failure in sales, especially when considering that it is a first generation product. Compared to the iPad 1 and 2, it is a far more Enterprise ready product and way better positioned for use in large corporations and medical offices that are already set up as Microsoft environments.

    It is clear to me that the “Post-PC” era has truly begun. This, to me, means fewer clunky desktops and giant laptops and way more tablets and mini Air-esque laptops. In addition, the lifecycle of machines is definitely a lot wider now and will only broaden as battery technology gets better and allows for batteries that can last longer, charge faster and possibly never lost the ability to re-charge. The reality is that Microsoft is aware of this and making great strides toward it. But they have a lot of catching up to do against Apple and Google.

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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