Android PCs: Microsoft should be wary, even if no one buys one

One of the many new gadgets on display at this year’s Consumer Electronics Show was a couple of PCs that run Google’s Android operating system, rather than Windows.

HP has announced a 21-inch all-in-one desktop PC aimed at the business market called the Slate 21, while Lenovo has announced the consumer-focused N308 Table PC. Asus, meanwhile, has announced a dual-boot Windows/Android hybrid device called the Transformer Book Duet.

Some commentators have been quick to hose down the prospect of Google’s smartphone platform making any impact in the desktop PC market – especially in the short term.

However, the very fact Microsoft’s long-suffering hardware partners are even willing to consider such a drastic move should be very worrying to Microsoft – even if no one buys one.

It’s no secret that the big PC makers – Lenovo, HP, Dell, Acer and Asus – are currently being crunched. According to Gartner, the fourth quarter of 2013 marked the seventh consecutive quarter of lower shipments. Across the PC industry, total shipments for 2013 are down 10% from 2012. If the industry were a country, its economy would look like Greece.

This past quarter, the chairman of Acer had to hose down speculation of a possible merger with fellow troubled Taiwanese tech giant HTC, as figures revealed its full-year shipments had collapsed by a massive 28.1% during 2013.

It’s hard to overstate how pivotal the PC makers, and their corporate predecessors (for example, Compaq, which merged with HP), were to the success of DOS and then Windows through the 1980s, 1990s and 2000s.

Microsoft basically had a whole industry selling its PCs. The market power saw off competitors such as Commodore/Amiga, Atari, Acorn and others – while Apple was on life support before Steve Jobs returned.

Now, at the same time as the PC makers are being crunched, Microsoft’s decisions to buy Nokia and release its own tablet – the Surface – has put it in direct competition with any PC maker opting to make Windows-based devices in the growing smartphone and tablet markets.

There are a number of reasons behind this crunch. For many, a two- or three-year-old PC running Windows 7 is “good enough”. For others, a tablet or Chromebook is a better option than a laptop PC. Meanwhile, some happy iPhone and iPad customers have made the decision to switch to Mac.

Windows 8 certainly isn’t helping matters. According to some figures, just 25 million PC users have opted for Windows 8.1; a sales figure well and truly in Vista land. Consumers and business owners have seen a PC without a Start Menu – and, by and large, they don’t like it.

Within the next month or so, Microsoft is expected to announce its next chief executive. Three internal candidates are believed to currently be in the front-running – former Nokia chief executive Stephen Elop, Cloud and Enterprise group boss Satya Nadella or Business Development chief Tony Bates.

Almost as soon as they accept their new job, they will oversee two make-or-break challenges that will shape the company’s destiny.

The first will be overseeing the creation of the next major version of Windows, dubbed Windows 9. Microsoft cannot afford this product to flounder or draw the type of consumer criticism Windows 8 and 8.1 have.

The second, and far more difficult challenge, will be placating the increasingly edgy PC makers. The Android PCs are a potent symbol of this deteriorating relationship and willingness to abandon Windows when they’re presented with a viable alternative.