News

Microsoft Hit by Slowing Sales of Windows Consumer Devices

• By Kurt Mackie
• November 30, 2012

Windows computing device sales so far haven't got much of a push from Windows 8's launch, according to The NPD Group, a consumer marketing firm that covers retail industries.

Recent Windows device sales have declined 21 percent relative to the same back-to-school sales period last year, NPD estimated. Windows 8 became publicly available on Oct. 26, and a year ago Microsoft's flagship operating system was Windows 7, so the device sales decline is just a comparison of two sales cycles with different OSes. In the case of Windows 8, the NPD Group said it measured sales from Oct. 21 to Nov. 17, 2012.

This recent sales cycle represented a "bad back-to-school period" for Microsoft, in which Windows 8 represented 58 percent of Windows computing devices sold compared with Windows 7's 83 percent share a year ago, according to the marketing firm.

That finding doesn't necessarily contradict the claims of Tami Reller, Microsoft's chief marketing officer and chief financial officer for Windows. Reller recently told financial analysts at a Credit Suisse event that the Windows 8 upgrade momentum was outpacing that of Windows 7, according to Microsoft's transcript (.DOC). She also said that Microsoft had sold 40 million Windows 8 licenses over a month's time.

The difference between the two assessments is that NPD is talking about sales of Windows 8 devices, whereas Reller is referring to sales of Windows 8 licenses. It turns out that Microsoft is likely counting the distribution of Windows 8 licenses to original equipment manufacturers (OEMs) as part of its Windows 8 sales total. That means that people aren't necessarily using all of those 40 million Windows licenses. This point was explained by Patrick Moorhead, principal analyst at Moor Insights and Strategies, in a Computerworld interview.

Other disparate notes about Windows 8's early sales results are coming from OEMs selling Windows 8 machines. Asustek Computer's CEO David Chang told The Wall Street Journal that "demand for Windows 8 is not that good right now." Another explanation is offered by Nomura financial analyst Rick Sherlund, who indicated that PC sellers have been slow in delivering new Windows 8 tablets and ultrabooks, according to a Forbes story.

The numbers tallied by NPD did not include sales of the Microsoft Surface PC-tablet device. However, a Piper Jaffray survey of Black Friday sales recorded mostly Xbox sales from a Microsoft Store, and no Surface sales, over a two-hour period. In its study, NPD indicated that Windows 8 tablet sales represented "less than 1 percent of all Windows 8 device sales to date."

Surface Pro, when available, will cost more than Surface RT devices running ARM chips. Moorhead suggested that the $899 starting price of the Surface Pro "pushes it out of the volume tablet market," according to a Twitter post. Microsoft's Windows 8 Pro Surface x86-based tablet is expected to arrive on the market in January.

Windows computing device sales this year reflected an increase in the average sales price. Windows devices cost $477 on average this year, compared with an average $433 last year, according to NPD's research. Windows 8 notebook prices hit an average price of $867, pushing up the premium segment.