Death of the PC

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Computers today are just not selling like they used to, and many critics, analysts, and longtime Windows users have pointed the blame at one particular culprit and that is the Windows 8.

Public comments like ‘nobody is using Windows 8’ and that it’s ‘worse than the New Coke’ is what is being heard around. How true is that? Is what is to be found out.

Microsoft recently announced that it had sold off 100 million Windows 8 licenses to date. The mentioned rate puts the company’s newest OS at a similar situation of that of the Windows 7 at the same point in its lifecycle where Windows 7 was the most widely used PC operating system in the world.

But if global PC shipments are in free fall keeping in mind that IDC called the 14 percent drop in the first quarter the steepest single-quarter decline ever, then how can Microsoft keep selling licenses like it’s still the era of Windows 7?

There seems to be a one fold answer for that and it comes down to what is good for Microsoft is not necessarily good for the PC industry as a whole.

Dodging the inevitable

To a certain degree Microsoft is insulated from a suffering PC. The company not only sells licenses to PC makers, but also sells so-called site licenses directly to large enterprises with a huge user base, bypassing device manufacturers altogether. Microsoft also sells a smaller number of licenses directly to consumers through Windows 8 upgrades for PCs running XP, Vista, and Windows 7.

Windows 8 accounted for less than four percent of global PC usage between January and March, the firm reports in its most recent estimates. At the same point in its lifecycle, Windows accounted for nearly 11 percent of all PCs in use–nearly three times better than Windows 8’s usage.

Finally, Windows 8’s app attach rate–or the average number of apps per license–also suggests Windows 8 isn’t performing so well in the wild.

Windows 7 again?

Sagging shipments and usage percentages, though only tell half the story. When you look at the hard number of PC units shipped, manufacturers produced between 76 or 79 million units between January and March, depending which analyst estimate you’re reading.

Things get more interesting when you look back to the five-month anniversary of Windows 7. IDC and Gartner peg shipments from the first quarter of 2010 at 79 million and 87 million units, respectively. Basically, the PC shipments in 2010 and 2013 are fairly close unit-for-unit.

The major difference between the two years is the trends behind those numbers. In 2010, things were looking up; in 2013, not so much.

PCs against mobile

No matter how you count it, a slowing PC market is bad for PC manufacturers, even if per-unit shipments remain relatively flat.

Like fruits and vegetables, PCs have a limited shelf life. Prices can be slashed in a matter of months if cheaper components roll out. Aging PCs sitting in the retail pipeline risk becoming outdated as new technologies get released, reducing the price even further. As a result, PCs have to be sold at a generous clip to keep the industry running smoothly.

The PC market is anything but running smoothly these days–especially as Microsoft continues to remake itself as a devices-and-services company.

It’s no coincidence that while Microsoft is experimenting with making its own devices, device makers are experimenting with non-Microsoft operating systems such as Google’s Web-centric Chrome OS and Ubuntu Linux. PCs running alternative operating systems aren’t huge sellers, however, meaning at some point manufacturers will have to figure out how to better sell Windows 8, whether it comes loaded on a PC, a tablet, or a mobile.

For now, all eyes are on the second-half of 2013 and into 2014, when some big changes could help improve Windows 8’s prospects.

Microsoft will release the much-anticipated Windows 8.1 (a.k.a. Windows Blue) refresh later in 2013. The company is also reportedly relieving the cost burden for device makers by cutting the licensing price of Windows 8 for small-screen devices. In addition, Intel will also release new Atom and Core processors expected to make Windows 8 devices leaner, longer-lasting, and more powerful.

Will the coming round of Windows 8 device and software improvements be able to spur a new round of growth for Windows-based PCs and tablets? Right now, it’s anybody’s guess–but let’s hope so, because the numbers clearly show that the PC industry can suffer even while Microsoft thrives.

From ITvoir News Desk/Darab Bakhshi

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