Bill Gates: Users 'Frustrated' with iPads

Apple's iPad may be a market-leading tablet but Microsoft founder and chairman Bill Gates this morning dismissed its usefulness saying they lack the breadth and capabilities of new devices based on Windows 8 (including the company's own Surface).

Acknowledging the iPad's dominance Gates told CNBC the following: "A lot of those users are frustrated. They can't type, they can't create documents, they don't have Office there. We're providing them something with the benefits they've seen that have made that a big category, but without giving up what they expect in a PC."

Gates was sitting next to his close longtime friend, the billionaire investor Warren Buffet, in Omaha, which just wrapped up the Berkshire Hathaway annual board meeting (Gates is on the company's board). If you want to listen to his comments but don't want to hear what he has to say about interest and currency rates, investor confidence in wake of the three-year anniversary of the Flash Crash (has it been that long?) and his view on board governance, you can scroll to 7:22 when Gates is asked about the plummeting PC business.

In the interview, Gates also scoffed at the notion the PC's best days are over. "PCs are a big market," he said. "It's going to be harder to distinguish products, whether they're tablets or PCs. With Windows 8 Microsoft is trying to gain share in what has been dominated by the iPad-type device."

Regarding Microsoft's Surface hybrid PC-tablets Gates said: "You've got that portability of the tablet but the richness in terms of the tablet but the richness in terms of the keyboard and Microsoft Office of the PC."

Perhaps Gates implicit prediction that Windows will have a successful second life is right -- he's defied naysayers before -- but Windows 8 and its successors based on the new Windows Store or "Metro" style model will take time to gain acceptance, according to industry analysts and according to a survey of Redmond magazine's readership.

More than half, or 54 percent, said they don't have a single Windows 8 PC in their shop, according to our survey in which over 1,000 registered and qualified readers of Redmond magazine responded. And 37 percent say Windows 8 accounts for less than 10 percent of PCs, presumably a handful in most cases. Over the next year, 39 percent say they won't have any Windows 8 PCs, while in two years, more than a quarter, 26 percent, still won't have one. Only 8 percent say all of their PCs will be Windows 8 based in two years.

At the moment, the iPad and Android-based devices are the devices of choice. Apple delivered 19.5 million iPads, while Microsoft shipped a mere 900,000 Surface Pros and Surface RTs, market researcher IDC reported last month. Meanwhile 27 million devices based on Google's Linux-based Android operating system have shipped from a number of vendors. Windows 8 pales in comparison accounting for 1.6 million units and Windows RT just 200,000 units.

Even though Windows 8 has gotten off to a slow start, I believe it's too early to write it off. Surveys show what people are contemplating based on what they know now. When Microsoft reveals the future of Windows later this month, the company will need to convince users it has a compelling alternative. If it does, people's thinking can change in a very short amount of time. Either way, the future of Windows will take years to play out.

In addition to his enthusiasm for Windows 8, Gates gave a plug for Microsoft's emphasis on cloud computing. "The cloud is a gigantic opportunity because now there are so many things you can do in computing that just wouldn't have been possible before," he said. "You've got a lot of the top companies going to seize that opportunity."

Posted by Jeffrey Schwartz on 05/06/2013 at 1:15 PM