Amid Worst-Ever Drop in PC Market, Microsoft Hits 100M Win8 License Sales
May 7, 2013 9:34 AM
Microsoft officially announces Windows 8.1, promises big improvements are coming
Even as Microsoft Corp.'s (
) ambitious operating system redesign, Windows 8, hit the 100 million license mark there was a grim air of self-assessment amongst the company brass. Windows unit co-head and former business/marketing chief Tami Reller acknowledged in the earnings call, "Is it perfect? No. Are there things we need to change? Absolutely. We are being very real about what needs to change and changing it as thoughtfully and quickly as we can."
I. Microsoft Admits Windows 8 is a Work in Progress
Microsoft for the first time directly confirmed in the announcement that those changes are being wrapped into
. The new OS is expected to launch this fall, with
OEM test builds already leaking
. The new OS is expected to restore
some semblance of a "Start" button
, as well as allowing users to
opt to boot to the desktop
Microsoft would not say when the new OS will launch saying only that it will be "available later this year". Microsoft says more details will be announced in the next couple weeks.
Launching Oct. 26, Microsoft's Windows 8 has kept pace with Windows 7 in license shipments for the period (Windows 7 hit 100m on April 27, 2010), which do not necessarily reflect end unit sales. However, sales are noticeably decelerating. Windows 8 reached
60 million unit sales by January
, faster than Windows 7. But since it has only moved 40 million units. By contrast, Windows 7 sales started off slower then rapidly escalated.
Microsoft is currently working on Windows 8.1 [Image Source: WindowsForum.eu]
The contrast stems largely from customer reaction. With Windows 7, customers were wary from poor press and bad initial experiences to Vista, but quickly embraced the speedy overhaul of the familiar Windows interface once they experienced it. Windows 8 appears to have had the opposite affect. Customers started off optimistic off the high of Windows 7, but
quickly chilled to the redesign
due to its drastic and at times confusing nature.
Tami Reller to Windows 8 users: "we're not sitting back." [Image Source: Microsoft News]
One big problem with Windows 8 is that despite the radical overhaul customers are presented with no basic tutorial on how to use the new OS when they turn it on for the first time. Ms. Reller acknowledges that her company has perhaps over-innovated without giving customers a clear learning path commenting, "The learning curve is real, and we need to address it. We're not sitting back and saying, they will get used to it. We've considered a lot of different scenarios to help traditional PC users move forward as well as making usability that much better on all devices."
II. Lack of Affordable HD Laptops is Hurting Win8
A big problem is that while companies like Apple, Inc. (
) or Samsung Electronics Comp., Ltd. (
) have no problem producing $500 USD high-resolution tablets, computer makers seem clueless as to how to produce an affordable touch laptop, much less a high-resolution one. Most touch laptops remain
above $800 USD
, while most 1080p or better laptops remain above $1,000 USD. But the alternative is accepting a relatively crippled Windows 8 experience in non-touch form factors.
The Aspire R715.6-inch is among the >$800 USD Windows 8 laptops/hybrids.
The lack of affordable, high-quality, useable options has plunged PC sales by 14 percent in Q1 2013, the
biggest drop in history
according to the International Data Corp. (
Ms. Reller sounded hopeful on this note, commenting, "We know customers like touch laptops, but they are also price sensitive. Our partners (hardware makers) have to bet on volume, so that they get price breaks, and get that moving into the (retail) channel."
III. Tablet Sales Poor, RT Tablet Sales are Worse Than Poor
Things did not go very well on the tablet front, either. While Microsoft's Surface sales hit 900,000 unit in Q1 that pales in comparison to the 19.5m iPads sold by Apple or the 8.8m Galaxy tablets moved by Samsung. Microsoft is reportedly working on a smaller, more affordable Surface, in line with Apple and Samsung's strategy.
Ms. Reller tried to look on the positive side, commenting, "The launch of Pro has also been helpful for Surface overall."
Surface Pro helped cover nonexistent Surface RT sales. [Image Source: Microsoft]
Of course, as that comment hints at sales of Surface RT have tanked. Windows RT tablet sales in general have
taken an abysmal turn
, moving only 200,000 units in Q1 2013, according to the IDC. Ms. Reller
Windows RT, arguing, "Our commitment to the ARM platform is very strong. We've done, I think, a good job at really listening to our partner feedback on where they want to take the ARM platform. We're listening, we're continuing to evolve, and I think you'll see that over the next several quarters from us … our continued agility on Windows RT and ARM."
, Inc. (
, Inc. (
and the Lenovo Group
) have all attacked the embattled Windows RT, complaining about its lack of legacy compatibility and Microsoft's poor marketing of the platform.
Ms. Reller called ARM chipmakers Qualcomm, Inc. (
) and NVIDIA Corp. (
) "two great partners". Qualcomm
recently defended Microsoft's Windows RT
, while NVIDIA refused to publicly give any comments of support (or criticism) regarding it.
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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