Microsoft Corp. (Nasdaq: MSFT) has radically retooled its flagship product, Windows 8, to fight for a bigger piece of a mobile computing market currently dominated by its rivals.
Microsoft unveiled a beta version of Windows 8 at the Mobile World Congress in Barcelona last week.
With a final release expected in the fall, Microsoft needs Windows 8 to be a winner.
Microsoft's Windows, which has owned desktop computing with a market share well over 90%, has not fared as well on mobile devices like smartphones and tablets.
Instead, Apple Inc. (Nasdaq: AAPL) and Google Inc. (Nasdaq: GOOG) have dominated the "post-PC era" with such products as the iPad and the Android operating system.
The Redmond, WA, tech giant now hopes that Windows 8, optimized for the touchscreens of mobile computing but sharing a unified look and feel between its tablet and desktop versions, will reverse its fortunes in mobile computing.
"Microsoft's future path is riding on Windows 8 and its success," Gartner Inc. (NYSE: IT) analyst David Cearley told the Associated Press. "This is a chance for Microsoft to re-establish itself in a market where it's becoming increasingly irrelevant."
Microsoft is at a critical juncture.
The Windows and Office franchises that the company was built on rely on continued growth in the PC market which has slowed in recent years.
This stagnation in the PC market has hurt Windows sales. Revenue from the Windows division was down 6% in the December quarter - the fourth time in the past five quarters that revenue from Windows has declined year-over-year.
Meanwhile, Apple has become the most valuable company in the world on the strength of its iPhone and iPad businesses.
Unless Windows 8 can establish a strong presence in mobile computing, Microsoft risks getting left on the sidelines of tech - still moderately successful, but with little chance for growth and waning influence.