Microsoft is facing increased competition from MacBooks and Chromebooks, with the global notebook OS market share for Windows 8 already dropping to below 90%, according to Taiwan-based supply chain makers.

Thanks to iPhones and iPads, demand for Apple's Mac series products has also been rising in the past few years.

Meanwhile, Google is seeing increased Chromebook demand from the US and the UK's education procurement and enterprise markets. By the end of 2014, vendors including Acer, Asustek Computer, Dell, Hewlett-Packard (HP), Lenovo, LG Electronics and Toshiba are together expected to launch about 20 Intel-based Chromebooks priced at around US$349, the sources said.

To counter, Microsoft has recently extended its free Windows 8 licensing coverage and is cooperating with HP and Acer to release US$199 notebooks at the end of 2014, the sources noted.

In addition to extending free licensing for Windows 8, Microsoft may also need to revise the shortcomings of Windows 8 and accelerate its pace on the development of Windows 9 in order to stay competitive, the sources added.