Microsoft had a tough year. The software giant launched two major operating systems—Windows 8 and Windows Phone 8—and was constantly battling with Google over applications and services on the Web.
However, those efforts proved fruitless as these products have yet to show that they are going to produce new large scale growth in their respective markets. What’s more, consumers who saw more to like elsewhere largely ignored Microsoft’s tablet, the Surface RT.
Still, its own products didn’t only cause Microsoft’s troubles. The software giant is facing more competition now than ever. Companies like Apple, Nokia, and Sony are causing it a lot of headaches. Despite Microsoft’s ability to continue to generate billions of dollars each quarter, the company is walking into 2013 in a worse competitive position than it was in when it entered 2012.
Unless it addresses its issues and finds a way to stymie its competitors’ growth, Microsoft could eventually find itself marginalized in markets such as PC operating systems and applications that it has long dominated.
Until then, let’s focus on the products that have caused Microsoft some trouble in 2012. Check out the roundup:
1. Windows 8
Windows 8 was supposed to be the operating system that would welcome the world to Microsoft’s new design philosophy. Instead, the operating system has been criticized for having a steep learning curve and hasn’t produced the rapid uptake in sales and upgrades that Microsoft expected.
That better change in 2013.
2. Windows Phone 8
Windows Phone 8 is a major step up over Windows Phone 7. However, the operating system owns an extremely small slice of the mobile space. Microsoft says that things will change once more Windows Phone handsets are shown off at CES in January and the Mobile World Congress in February. But most analysts agree that the company’s software won’t nab double-digit share for at least the next few years.
So, why is Windows Phone having such trouble? Blame it on Android. That operating system owned 75 percent of the mobile space in the third quarter and is expected to have about as much ownership in the fourth quarter. What’s worse for Microsoft, it’s expected to be dominant for the foreseeable future.
4. Google Apps for Business
Microsoft at one time unquestionably dominated the office email space with Outlook. However, Google has made serious inroads with its Apps for Business suite, which includes Gmail, Calendar, and collaboration tools. Microsoft has tried to respond with Outlook.com and Office 365, but it’s not clear those solutions will fend off Google cloud application challenge
Microsoft’s Tough 2012: 10 Products That Gave it the Most Grief
Apple’s iPad is the top tablet on the market. And its success is what prompted Microsoft to try its own chances in that space with the Surface. However, the Surface hasn’t been selling very well and Apple’s slate is hugely popular. Until Microsoft can respond to the iPad with something that appeals to customers, it will be inconsequential in the tablet space.
Apple’s iPhone is another major thorn in Steve Ballmer’s side. That device is selling like gangbusters and so far, no other device, save for the Samsung Galaxy S III, has come even close to matching it. There’s talk that Microsoft might unveil a smartphone in 2013, but if it does, will it be able to compete with the iPhone?
7. Google Search
Bing is still very much a work in progress. While it has made some modest gains, Microsoft would like to see it grab some serious market share from Google. Unfortunately for Microsoft, that hasn’t happened. And judging by the current state of the search market, Bing won’t get close to Google anytime soon.
8. Nokia’s Lumia line
Nokia is arguably Microsoft’s most important Windows Phone partner. However, the Lumia’s performance has been middling at best. That’s really bad news for Microsoft. The Lumia was supposed to be the reason consumers would adopt Windows Phone. Instead, it’s a product line that’s turning people away from the operating system.
For the first time, the laptop market is down this year while the desktop space continues to decline. Overall, PC shipments are proving disappointing. Much of that is due to tablets, but it might also have to do with poor PC designs. Microsoft needs some extra help from PC makers or things could get worse for Windows and its desktop efforts.
10. Sony’s PlayStation 3
Sony’s PlayStation 3 has come on extremely strong in the console market. In fact, Microsoft’s Xbox 360, which has largely controlled the U.S. space, could be relegated to third place by the time this console generation passes into obsolescence. Luckily for Microsoft, it will be readying a new console next year to compete with the next-generation of devices, including the Nintendo Wii U.