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Microsoft's big gamble with Windows 8

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James Manning

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Windows 8 launches in Japan

Microsoft's new look and touch-friendly operating system, Windows 8, goes on sale in Japan.

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Microsoft has thrown down the gauntlet to Apple with the official launch of Windows 8, a new operating system that focuses largely on tablet and mobile devices.

As consumers increasingly turn to smartphones and tablets for their computing needs, sales of PCs are expected to decline this year for the first time in 11 years, says research firm IHS iSuppli.

Big push ... Microsoft CEO Steve Ballmer gives his presentation at the launch of Microsoft Windows 8.

Big push ... Microsoft CEO Steve Ballmer gives his presentation at the launch of Microsoft Windows 8.

In the ever-expanding tablet market, Apple dominates with about a 75 per cent market share in Australia, according to research firm Telsyte. Microsoft's shift towards mobile is widely seen by analysts as a challenge to Apple's dominance.

But it could be too little, too late, according to analysts. "Microsoft is coming to this very late," said Joseph Sweeney, an advisor at Intelligent Business Research Services.

"Microsoft needs to be positioning itself so that it is placed just as strongly in this new era of computing as it was in the PC era," added Matt Oostveen, chief of research at research firm IDC.

Microsoft joins the tablet market with Surface.

Microsoft joins the tablet market with Surface.

In one of the biggest overhauls of the Microsoft operating system to date, Windows 8 does away with traditional menus, navigation and the popular 'start' button that has been familiar to Windows users - which make up 90 per cent of PC users worldwide - since Windows 95.

Instead, users are greeted with a 'start screen', which is comprised of 'tiles' for different apps such as email, calendar, contacts and social networking.

"This is Windows re-imagined," said Pip Marlow, managing director of Microsoft in Australia. Asked whether Windows 8 represented a challenge to Apple and a move towards mobile, she said: "It's a step beyond that; it's about getting what you want on the device you want."

Microsoft hopes their new tablet will help them catch up with Apple and Google.

Microsoft hopes their new tablet will help them catch up with Apple and Google.

But analysts and consumers were less enthusiastic about the launch, with confusion surrounding different versions and features of the software. Some tablets will run the full version of Windows 8, while others will run a lite-version, Windows RT.

"They need to market this correctly and articulately, and at the moment there's no differentiation from the market's perspective of the different types of Windows 8 that are available," said Mr Oostveen.

It was also revealed that so far, Windows 8 will only be available as an upgrade version in Australia, rather than as a stand-alone full version.

Microsoft Australia managing director, Pip Marlow, and Harvey Norman executive chairman, Gerry Harvey, pose for a photo at Harvey Norman Alexandria in Sydney after the midnight launch of Windows 8. Click for more photos

Microsoft launches Windows 8

Microsoft has launched Windows 8 and its Surface tablet to the masses. 

An upgrade to Windows 8 will be available to current users of Windows XP, Vista and 7 for $39.99 until January 31, 2013. Windows 7 PCs purchased between June this year and February 2013 can be upgraded for $14.99. It can also be purchased in stores for $69.99.

Also unveiled at the event in Sydney was the Surface, a late entry for Windows into the tablet market, which marks the company's first venture into manufacturing a tablet device.

Ms Marlow was confident about the company's forray into touchscreen devices. "We're going to continue to innovate in that area," she said.

The base model of the surface, which has a 10-inch screen and 32 GB of storage will cost $539. A step-up version costs $789 has twice the memory, 64 GB, and includes a the keyboard 'touch cover'.

The Surface has been well received so far, but analysts remained sceptical. “It's really a good experience, but having the best experience doesn't always result in market share," Mr Sweeney said.

The launch came just three days after Apple unveiled its iPad mini. Apple chief executive Tim Cook was quick to take a swipe at Microsoft, labelling the Surface tablet "a fairly compromised, confusing product".

Despite these misgivings, Microsoft reported that pre-sales of Windows 8 have outstripped those of its predecessor , Windows 7, by 40 per cent.

"I would never count Microsoft out," said Mr Sweeney.

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