August is often a slow time for technology and consumer spending, but the dying PC market may be about to see a resurrection. Microsoft Corp. (NASDAQ: MSFT) has fixed many of the bad things about Windows 8. We will not go so far as to say that this will resurrect Microsoft Surface tablet sales, but it could make those who want a new PC more interested than they were when they realized that Windows 8 was such a learning experience that they might as well go to Apple Inc. (NASDAQ: AAPL).
Windows 8 was a flop, according to many analysts and investors. What was amazing was that Microsoft’s stock appreciation in 2013 was massive. Microsoft seemed in such envy of Apple that its look and feel went to much more visualization. The upgrade was so different from prior Windows releases that, why not just take the learning curve to an extreme and switch to a Mac?
So here is the crux of the matter on repairing a damaged brand and a damaged product. Microsoft said:
We’ve hit an important milestone for Windows and for Microsoft — just 10 months after delivering on a bold, generational change in computing with Windows 8, our team is proud to share that we have started releasing Windows 8.1 and Windows RT 8.1 to our hardware partners. In many ways, this marks a new day at Microsoft, reflecting a number of rapid release firsts.
As far as why we said that the death could face a resurrection, it is really a story for the holiday season. General availability of the Windows 8.1 upgrade is slated for October 18. This is the date that the upgrade will be broadly available for commercial customers, with or without volume licensing agreements, and for consumers. A mid-October release gives the company two full months to market the hell out of Windows 8 ahead of the holidays.
The real companies hanging in the balance here are Dell Inc. (NASDAQ: DELL) and Hewlett-Packard Co. (NYSE: HPQ). Both companies are in a turnaround, even though Dell is in the midst of a management and private equity-led buyout. If you looked at the most recent earnings results from both Dell and HP, the commonality was declining core operations with lower PC sales. Even increasing IT offerings is not enough to fix the weakness that has been seen in PCs, and prior declining PC sales reports even went so far as to blame Windows 8 for the poor unit sales.
While Apple’s Mac is a serious competitor to PC sales, the real threat is the move to iPhones and iPads from Apple, and the smartphones and new and upcoming tablets running on the Android system of Google Inc. (NASDAQ: GOOG). Unfortunately for Google shareholders, that did not exactly translate to additional stock gains after its earnings report in July. Google shares are down almost 8% from the pre-earnings highs.
What is good is that the Windows 8 relaunch as Windows 8.1 is now formally set and confirmed. The wild card is that Microsoft also is looking for a new CEO because the Steve Ballmer exit is coming sooner than many expected. We have even taken a stab at who might replace Steve Ballmer and it is possible that Warren Buffett could even be involved in the business and hiring decision.