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Windows 8 is the next Windows ME? The sales numbers suggest that accusation is malarkey

Windows 8 was an incredibly bold redesign on the part on Microsoft Corp. (MSFT).  The move to a more touch-friendlygraphically rich operating system certainly seemed to mirror the general direction of the device market, but that did not shield Microsoft from loads of criticism. Many wondered whether it went too far with the graphical gloss, whether it was disrespecting developers with its shift to a walled-garden "Windows Store" app distribution model, and whether it was forsaking traditional desktop power users.

I. Windows 8 Upgrade Sales: Very Strong

But the proof is in the sales, and Microsoft announced today that for all the haters, Windows 8 appears to be doing great.

In its first month of sales Windows 8 has moved 40 million licenses, according to Microsoft.  The company announced the news in a blog post and at a conference presentation.  It also points out that buoyed by reduced upgrade fees, the Windows 8 upgrade rate is outpacing that of Windows 7, the previous sales record-holder.

Indeed, our own polling shows that the majority of users are upgrading to Windows 8, although there are certainly many holdouts bitter about the changes.

Windows 8 boxes
While some upgrades have been via disc, the new OS has largely been digitially distributed.
[Image Source: The Verge]

Windows 8 is the first Microsoft OS to transition to a primarily online distribution.  That shift has not seemed to adversely impact sales.  It appears Microsoft timed its transition to disc-less media correctly.

II. The Road Ahead

Microsoft's Brandon LeBlanc also brags that its Windows Store is thriving, writing:

There were more apps in the Windows Store at launch than any other app store at their launch and since then, the number of apps in the Windows Store has doubled. A number of apps in the Windows Store have crossed the $25,000 revenue mark and the developer keeps 80% of the revenue they make off downloads for the life of their app. A lot of great new apps have been added to the Windows Store since launch such as CBS, ABC News, ABC Family, Engadget, Flixster, OWN (Oprah Winfrey Network), Vimeo and my (current) personal favorite - Top Gear.

A strong app market is good news for Microsoft.  While it offers a more favorable revenue split than other players like Apple, Inc. (AAPL) or Google Inc. (GOOG) (with developers keeping 80 percent of the revenue), Microsoft still is closing the loop to include itself in Windows software sales profits.

In the past, Windows Certification processes offered up small cuts to Microsoft, but software publishers largely pocketed these profits.  Now Microsoft has cut out the middle man by playing super-publisher with Windows 8, the same move Google and Apple have made with their mobile and personal computer platforms (although Google does allow unofficial third party channels).

Ballmer Slate
Microsoft needed a bold reinvention in the mobile direction to keep up with market trends.
[Image Source: Bloomberg]

Looking ahead, Microsoft has a lot of unanswered questions -- most notably on the leadership front.  Windows 8 was the baby of departed Windows President Steven Sinofsky.  His shoes are currently being filled by former CFO and CMO Tami Reller on the business/marketing front and by Internet Explorer, Office and Windows interface veteran Julie Larson-Green on the software/hardware development front.

And the deep divisions between those who love Windows 8 and those who hate it, could hint that sales may dip to a slower pace than Windows 7 after the fans have completed their upgrades.

But, given the already modest success, and given the life-or-death need for Microsoft to have a cohesive, touch-friendly mobile platform, it appears overall Microsoft made the right choice.  Windows 8 isn't perfect, certainly and as they say, haters are going to hate.  And that is certainly true of Windows 8.  But it's better to be hated for innovation than panned for lack thereof.

Source: Microsoft



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RE: Malarkey
By tayb on 11/28/2012 1:55:02 PM , Rating: 4
All aboard the excuse train. Choo choo.

Sorry that Windows 8 isn't the epic failure that all the "techies" on here predicted it would be...


RE: Malarkey
By messele on 11/28/2012 2:48:35 PM , Rating: 2
What, you mean the self-proclaimed harbingers of tech-nirvana that ram their "my way or no way" attitudes down everybody's throats may not be as in touch as they think they are?

Nah, not possible.


RE: Malarkey
By Cheesew1z69 on 11/28/2012 3:35:51 PM , Rating: 2
Like you?


RE: Malarkey
By B3an on 11/28/2012 3:22:42 PM , Rating: 4
Agree.

And heres some counter points for that guys stupid excuses:

Yes Win 8 is cheaper, but Win 7 was a free upgrade to anyone who bought a PC within 3 months before Win 7 release. Theres no free upgrade offer for Win 8.

There was also literally millions of people waiting for Win 7 because they was still on XP and didn't want to go near Vista. It was inevitable that 7 was going to sell very well.

Yet Win 8 has sold more in the same amount of time. Could it just be that people actually like it and want it. I consider 8 a big improvement over 7 on my desktop PC which i heavily use for work.


RE: Malarkey
By 91TTZ on 11/28/2012 4:47:01 PM , Rating: 2
Actually, Windows 8 profits are way down compared to Windows 7.

A certain percentage of Windows 8 licenses are sold to OEMs like Dell to put on their desktops and laptops (which aren't selling well in case you haven't been keeping track of the news)

And the average selling price of Windows 8 is only a fraction of the cost of Windows 7. Windows 8 may even be a loss leader for Microsoft, we'll never know.


RE: Malarkey
By Florinator on 11/28/2012 4:51:55 PM , Rating: 2
quote:
Actually, Windows 8 profits are way down compared to Windows 7.


This statement is based on what data?


RE: Malarkey
By 91TTZ on 11/28/2012 5:05:31 PM , Rating: 2
Because they sold marginally more units than Windows 7 except at less than half the price. Also keep in mind that they released this right during the holiday season so it's expected that they're going to sell more. Everyone sells more stuff this time of year.


RE: Malarkey
By TakinYourPoints on 11/28/2012 6:24:55 PM , Rating: 1
The number of Windows 8 copies sold to DIYers is very small given that that particular segment of users has been getting smaller every year.

They didn't cut the cost for OEMs, at least as far as I know, and that's what really matters since that makes up the bulk of their income.


RE: Malarkey
By 91TTZ on 11/29/2012 10:48:24 AM , Rating: 1
But it's pointless to count OEM sales since that doesn't reflect how much consumers like the OS. Nearly all PCs are sold with a Microsoft OS on them, and that OS is going to be whatever they currently are selling. The number of licenses they move will then be proportional to the number of PCs sold in the industry. I think that Microsoft has something like a 90% market share, so you can just multiply the number of PCs sold by .9 and come up with how many licenses Microsoft has sold.

People universally hated Windows ME, yet Microsoft's sales of that were good while it was out. That's because any consumer PC that was sold at that time pretty much got Windows ME preloaded from the factory.


RE: Malarkey
By EricMartello on 11/28/12, Rating: -1
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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