Several media outlets reported on Tuesday morning that Microsoft was planning large-scale changes to its new Windows 8 operating system, but the software giant will face some notable limitations on what exactly it can do with the software that has so far failed to reverse the slump of slowing PC sales.
Reports on Tuesday were stemming from a blog post and a handful of interviews granted by Tami Reller, the chief marketing and finance officer for the Windows business at Microsoft MSFT . In her blog, Reller confirmed that an update called Windows Blue is coming later this year and will allow the company “an opportunity for us to respond to the customer feedback that we’ve been closely listening to since the launch of Windows 8 and Windows RT.” (It’s worth noting that Microsoft said the same thing on its April 18 earnings call.)
Some media outlets took the statements as an admission by the company that Windows 8 has been a failure. The Financial Times wrote that Microsoft was preparing a “U-turn on Windows 8,” as Reller told the paper that “key aspects” of how Windows 8 is used will be changed.
It remains unclear what “key aspects” refers to, but the most significant change that Windows 8 brought to the platform is the Metro interface that is primarily designed for touch-based computing devices. And since all of the major PC makers — and key Microsoft partners — are rolling out more touch-based PCs in the later half of this year, it is highly unlikely that Microsoft can backtrack on this approach. PC sales have slumped significantly because of heavy competition from touch-based mobile devices like tablets, so hardware manufacturers have a strong incentive to get into this market, and Microsoft needs them to succeed for its own platform to succeed.
“With over 300 million PCs in the world and many diverse OEMs, there is enormous coordination required to move to a new operating system, like Windows 8,” wrote Brendan Barnicle of Pacific Crest in a note on Monday. “OEMs are developing new Windows 8 devices, and there are more touch-based applications entering the market, which should help to accelerate Windows 8 deployments.”
With Microsoft’s shares slipping nearly 1% on Tuesday morning, investors don’t seem to be placing much stock in the idea of a major overhaul of Windows 8. The next major milestone will likely be Microsoft’s developers’ conference known as Build 2013, which takes place in San Francisco on June 26-28. There, the company is expected to preview Windows Blue and give more details on its planned launch.