version of its Windows operating
system to address complaints and
confusion that have been blamed for
deepening a slump in personal
computer sales.
The tune up announced Tuesday won't
be released to consumers and
businesses until later this year. The
changes, part of a software package
given the codename "Blue," are a tacit
acknowledgment of the shortcomings
in Windows 8, a radical overhaul of
Microsoft Corp.'s ubiquitous operating
system.
With the makeover it released last
October, Microsoft hoped to play a
more prominent role in the growing
mobile device market while still
maintaining its dominance in PCs. But
Windows 8's design, which emphasizes
interactive tiles and touch controls,
seems to have befuddled as many
people as it has impressed. One
leading research firm, International
Data Corp., says Windows 8
contributed to a 14 percent decline in
worldwide PC sales during the first
three months of the year - the biggest
year-over-year drop ever.
Meanwhile, sales of smartphones and
tablet computers are booming. The
biggest beneficiaries have been Apple
Inc., the maker of the iPhone and
iPad, and Samsung Electronics Co.,
which sells the most devices running
on Google Inc.'s Android software.
Google is also benefiting from
Android's popularity through increased
traffic to its services, creating more
opportunities for the company to
display ads.
By contrast, leading PC makers such
as Hewlett-Packard Co. and Dell Inc.,
which primarily sell Windows-powered
machines, have been mired in a
financial funk that has battered their
stocks and raised questions about their
futures.
Despite the troubling signs, Microsoft
insists it's pleased with Windows 8's
performance.
The company, which is based in
Redmond, Washington state, says
more than 100 million Windows 8
licenses have been sold so far, up
from about 60 million licenses in
January. The licensing volume "is in
the same general ballpark," as
Microsoft's previous operating system
- Windows 7 - at a similar juncture of
its sales cycle, according to Tami
Reller, who serves as the marketing
and financial chief for Microsoft's
Windows business.
In an interview, Reller said Microsoft
still realized changes need to be made
to make Windows 8 easier to navigate
and capable of taking full advantage of
technology improvements that have
come out since October.
"Are there things that we can do to
improve the experience? Absolutely,"
Reller said "There is a learning curve
(to Windows 8) and we can work to
address that."
For now, Microsoft isn't saying what
kind of changes will be introduced with
the release of Blue, which the
company plans to anoint with a
different name when the update is
available. Microsoft also isn't saying
whether it will charge existing owners
of Windows 8 devices to get the fixes
in Blue. The company plans to release
Blue in time for the holiday season.
Reller said more details about Blue will
be released before Microsoft holds a
developers conference in San Francisco
in late June. Some of Blue's features
are expected to be previewed at that
conference.
If Blue is meant to make people more
comfortable, the changes may
incorporate more of the elements
from earlier versions of Windows.
A common complaint has centered on
the lack of a "start" button in the
Windows 8 menu.
Other critics have pined for an option
that would allow the system to begin
in a desktop mode suited for running
applications designed for earlier
versions of the operating system.
Windows 8 currently starts off
showing a mosaic of interactive tiles
tailored for swiping through programs
with a finger instead of using a
computer mouse.
Blue also might make it easier to find
a set of controls - known as "charms"
in Windows 8's parlance - that
currently must be pulled out from the
right side of a display screen.
Besides responding to customer
feedback, Blue also will improve
Windows 8's ability to work on smaller
tablets with 7- and 8-inch (17.5- and
20-centimeter) display screens, Reller
said. She declined to say whether
Microsoft intends to make smaller
version of its own Surface tablets. In a
conference call with analysts last
month, Microsoft Chief Financial
Officer Peter Klein said the company
was working with other manufacturers
to make smaller tablets.
One thing that Blue won't fix: the
relatively small selection of mobile
applications tailored for Windows 8.
Reller said the Windows 8 store now
has more than 60,000 apps. By
contrast, there are more than
800,000 apps available for Apple's
mobile's devices and nearly that many
for Android devices, too. In one of the
most glaring omissions on Windows 8,
Facebook Inc. still hasn't designed an
app to make its online social network
more accessible on that system.
Facebook has about 750 million
mobile users.
Microsoft's decision to tweak Windows
8 so soon after it went on sale may
reinforce perceptions that the product
is a flop.
Reller is trying to frame the changes
as evidence that Microsoft is becoming
more agile and nimble as it responds
to a rapidly evolving technology
market. Smartphones and tablet
computers have been at the epicenter
of the upheaval, diminishing the
demand for PCs as more people and
businesses opt for the convenience of
increasingly powerful mobile devices.
The mobile computing movement is
the main reason that Microsoft made
the most dramatic redesign of its
Windows operating system since
1995. Given how different that
Windows 8 is from its predecessors,
Reller said Microsoft always knew it
might have to make some
adjustments less than a year after the
software came out.
"It had to be a very big change to take
advantage of the mobile opportunity,"
she said.
Analysts say one reason Windows 8
got off to a slow start is because there
weren't enough devices designed to
take advantage of the system's touch-
screen features. But that is about to
change as HP, Dell and other PC
makers prepare to roll out a wide
variety of laptops and tablets with
displays that respond to touch. More
than 2,400 devices have now been
certified to run on Windows 8, up
from 2,000 in January, Reller said.
Most of the touch-screen laptops will
sell at prices $50 to $250 below the
first wave of comparable machines
running on Windows 8, reductions that
Microsoft hopes will prod more people
to check out the system.
"As we look at Windows 8, it's
important to remember a lot of its full
potential won't be realized until there
are more touch devices on the
market," Reller said.
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