Windows 8 PC Sales Continue to Lag Behind Those of Windows 7

Windows 8 PC Sales Continue to Lag Behind Those of Windows 7

Almost two months into the Windows 8 life cycle and a trend is starting to emerge: Sales of new PCs based on Windows 8 continue to lag behind those of Windows 7 PCs from the same period last year. But NPD claims a new culprit in this shortfall: Low-cost netbooks did “incalculable” damage to the PC industry and destroyed the high-end mobile market that Windows 8 now targets.

A report in “The New York Times” includes a suspicious amount of anecdotal information to make its point about the Windows 8 sales problems. But it at least provides a valuable first-hand quote from Acer president Emmanuel Fromont, who admits that sales of Windows 8 PCs were “off to a slow start” and “lower than expected.” It also cites NPD data that examines the period from the Windows 8 launch to beyond Black Friday.

I had previously and exclusively reported that launch-time and first-month sales of Windows 8 were both about 20 percent lower than Microsoft’s expectations. Microsoft internally blamed PC makers for the shortfall, since they did not show up with the variety or volume of new Windows 8-based PCs and devices that were promised in time for the launch. I also separately reported, again exclusively, that Microsoft would ramp up efforts to sell the Surface with Windows RT tablet via third party retailers ahead of the New Year, which of course began happening less than two weeks ago.

But now we have NPD weighing in on Black Friday and holiday sales.

The New York Times quotes NPD data showing Windows 8 PC sales were down 13 percent over the 6 week period between the Windows 8 launch and the post-Black Friday week. This is compared to the previous year, however, not the same period of time when Windows 7 launched.

NPD says that Windows 8 is launching into a market that is decidedly different than that faced by Windows XP, Vista, or 7, because PCs are no longer at the center of personal computing, and consumers are stretching out PC purchases longer than before. This seems fairly obvious, but the push for low-cost computing devices, which began with the netbook and now continues with tablets, has muted the demand for high-end PCs. And while there are lots of low-cost PCs for sale this season, they lack multi-touch and are hardly compelling; the multi-touch PCs that make Windows 8 shine are far more expensive.

It doesn’t help that tablets based on Windows 8 (and Windows RT, the ARM-based version of Windows 8) start at about $500 and quickly escalate in price. This holiday season, the best-selling tablets—the Samsung Galaxy Tab 2, Google Nexus 7, and Amazon Kindle Fire HD—all start at $200, less than half the cost of a cut-rate Windows 8 tablet. This price point, which Microsoft helped establish with the netbook, is contributing to the lack of consumer interest in Windows 8 devices and PCs. And the average selling price of PCs continues to fall, to below $400, a price point where almost all of the PCs consumers are buying are non-touch-based.

This splitting of the market has interesting ramifications. Microsoft should be credited for moving Windows quickly into the world of multi-touch tablets with Windows 8. But because consumers are now trained to expect low-cost devices, they are purchasing low-cost multi-touch tablets that don’t run Windows and low-cost Windows PCs which don’t offer multi-touch capabilities. And as of the end of 2012, tablet sales, overall, have eclipsed sales of notebook PCs in the US. This is a big change from a year ago.

None of this means that Windows 8 is a disaster, as some claim. Instead, it’s fair to say that Windows 8 is entering a much more volatile market than did its predecessors and that a lack of high-quality, low-cost options—indeed, largely PC makers’ fault—has contributed to consumers holding off on new PC purchases while they snap up lower-cost devices, most of which are used as secondary, or companion devices. Microsoft is obviously playing a long game with Windows 8, and it has created a foundation that can compete in this new world. But there isn’t a single Windows 8 PC or device that’s priced to do so right now. And Windows 8 will suffer by comparison this quarter as a result.

TAGS: Windows 8
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