Reports of PC Death by Windows 8 Have Been Greatly Exaggerated


IDC, the global market intelligence research group released holiday sales news for PCs and it certainly looks bleak as sales slid for the first time in 5 years.  The picture being painted here is that PC sales are declining in single digit percentage compared to the year before, but certainly on the decline as tablets, and other alternative computing devices are gaining share.  Among the choices consumers now have along with tablets are smartphones, netbooks and the spectrum of devices in between.  One curious story by Bill Rigby of Reuters throws this in a bit of haste at Microsoft’s doorstep and their Windows 8 campaign.  He’s not alone, there is no shortage of reporting that is doing exactly the same thing, just look around at the headlines like “Windows 8 fails to lift PC sales”.  It is pretty interesting that this notion has taken hold, but there’s a number of reasons why all these stories show a fundamental lack of understanding of why these statistics have emerged.

New Non-PCs are everywhere

The decline of PCs is not much of a surprise to anyone as the public has plenty of choices like never before – in how they want to consume media, news, videos, and more.  From low-cost consumer friendly tablets such as the Amazon Kindle to the leader of the pack, Apple’s iPad tablet line and its ecosystem of music, apps, and video – that market has a growing base as the competition and focus certainly vindicates.   There’s also the smartphone market- with Android and Apple are the dominant mobile OS platforms and are available on a mind-boggling variety of mobile hardware, ranging from low-cost models to high-end feature-rich models.  The point here is with so many choices, it is clear the PC market, did not really have a consumer friendly operating system that was truly ready for the emerging touch-interface world that is a hallmark of the tablet market.  That was supposed to change with Windows 8.

Windows 8 Ups and Downs

Microsoft has been waving the flag of sales and product success on a number of fronts and the platform certainly has a number of things going for it.  Just this week Microsoft announced it had hit 60 million licenses sold since Windows 8’s release.  This puts it on pace with Windows 7, a resoundingly popular and successful operating system.  Also news from CES had a number of intriguing Windows 8-based system releases that illustrate the partners are hitting the market with fresh, compelling options.  Looking collectively at these factors, a strong case can be made that Windows 8 has not really been the issue with PC sales at this point.  Sure, there was always going to be a worthwhile challenge in getting adoption of the Windows 8 experience out there, but this falls predominantly on devices that have not yet captured imaginations and have not found their market.  This includes the mediocre reports we’re starting to see about Windows 8 RT.  There are also indications that there have been product supply issues as Rigby’s article states:

Tami Reller, chief financial officer of Microsoft’s Windows unit, said sales of Windows 8 PCs may have been held back by shortages of the most popular touch-screen machines.

Windows 8: A TouchScreen OS

Windows 8 is all about the touchscreen.  Save for a fair amount of changes the full Windows 8 environment is built around maintaining Windows 7 compatibility.  That was always a big part of the sell, that this is a touchscreen OS that will work with devices that feature this in mind.  Many users still run Windows 7 comfortably and have no reason to migrate to Windows 8 other than the touchscreen capabilities.  You should see the system I’m writing this on.  So when you look at the fact that a significant number of people out there are nowhere near a hardware refresh or need an OS refresh, you’re predominantly left with new licensing for new PCs and touchscreen devices. The enterprise by nature largely takes a while to make the jump and that has never changed in the history of any OS- it’s not in their nature to make a quick run for shiny objects like consumers do.

It takes Two: Onus on the Partners to sell Windows 8

One thing Rigby is right about is that there was once a correlation where a new operating system release meant a boost in PC sales, however this is not that type of market anymore due to all that was stated above.  Consumers want additional choices.  In order to save the PC market, it is up to the partners to take up the Windows 8 vision and release innovative products that go beyond PCs.  When Steve Ballmer appeared unannounced at this weeks CES keynote it was quite telling of the importance of these partner relationships as they apply this partnership relations strategy across their mobile and OS initiatives.  Microsoft is notably taking up the charge themselves with their own Surface Pro device and is getting some attention for the prospects on that.  It could be the one shiny object for the enterprise that bucks the trend as there has long been a need for a true business level tablet system.  They are also reportedly on track for a major yearly refresh schedule for Windows 8.   Throughout, while there may have been a remote possibility and wishful hope that Windows 8 would be a breakout hit, it is way too early to call Windows 8 a disappointment as they are just getting started.