Preston Gralla

Microsoft has only 20% of total computer market, half of Google and trailing Apple, says Goldman Sachs

December 10, 2012 11:19 AM EST

Microsoft's total market share for computers including tablets and smartphones has plummeted from 97% to 20%, and by the end of this year its market share will be less than half of Google's, and will trail Apple's. So says Goldman Sachs in a recent report.

The Goldman Sachs report considers traditional computers, tablets, and smartphones as all being computers, and takes a look at the market share of Microsoft, Google, and Apple. Back in Microsoft's glory days, in 2000, the report says, 97% of all computers ran a Microsoft operating system. By the end of 2012, the report says, Microsoft will have a 20% market share, trailing Google, whose Android operating operating system will have a 42% market share, and Apple, whose operating systems will have a 24% market share. Other operating systems will have the remaining 14% market share.

Goldman Sachs doesn't see Microsoft becoming the king of computers again for the foreseeable future. It projects that by 2016, Microsoft will have a 26% market share, Google a 39% market share, Apple a 29% market share, and other operating systems will have a 5% market share.

The reason for Microsoft's fall is how poorly it has done in mobile. Goldman Sachs doesn't see that changing. The report also says that the center of the computing universe will eventually be tablets. It believes that people who buy tablets from one operating system vendor will likely buy smartphones from the same vendor.

According to the Seattle Times, here's the warning that Goldman Sachs had for Microsoft:

"Microsoft faces an uphill battle (though not insurmountable) given it lacks meaningful share in either tablets or smartphones and as such will need to rely on its appeal to knowledge workers to help drive adoption as its complement ecosystem will remain behind the iOS and Android platforms at least over the next 6-12 months.

"Nevertheless, we are optimistic that Microsoft will be able to regain some share in coming years assuming that adoption trends around the company's newly launched tablet and smartphone operating systems are positive."

There's a difference, of course between gaining some market share and becoming top dog in the computer world, and Goldman Sachs doesn't see Microsoft becoming that again for as long as its study forecast.

There's no doubt that Microsoft has known that its market share has been plunging. But its answer to that has been the wrong one, designing an operating system for traditional computers that works better on tablets than computers. It should instead focus on designing the best tablet operating system for tablets and a separate best operating system for computers, like Apple did. A one-size-fits all operating system won't get back Microsoft's lost market share.