Why Windows 8 sales are struggling

30 Nov 2012
Surface

Analysts say Windows 8 has had a slow start compared to Windows 7

Windows 8's sales are struggling, hit by high device prices, low inventory for key products, and a market flooded with cheaper Windows 7 PCs.

It's been a month since Windows 8 officially arrived, and over the past week analysts have weighed in with sales results - as has Microsoft.

While Microsoft claimed it had sold 40m Windows 8 licences - putting it ahead of Windows 7 sales over its first month - many of the third-party reports have been downcast, suggesting Windows 8 is off to a slow start.

Net Applications data shows that only 1.1% of users surfing the web are running Windows 8, which compares to the 3.5% Windows 7 had achieved a month after launch. Rival web analytics firm StatCounter reported similar data, saying Windows 8 was being used by 1.31% of web surfers, compared to the 4.93% seen by Windows 7 a month after its launch.

After just four weeks on the market, it's still early to place blame on Windows 8 for the ongoing weakness in the PC market

Separately, Nomura has cut its PC sales forecast after the "awkward" launch of the OS, and now NPD has weighed in with more ill-tidings.

The analyst firm reported that Windows device sales for the month are down 21% on last year, with laptops down 24% and desktops down 9% - suggesting Windows 8's arrival has done little to help lift the PC market.

"After just four weeks on the market, it's still early to place blame on Windows 8 for the ongoing weakness in the PC market," said Stephen Baker, vice president of industry analysis at NPD Group. "We still have the whole holiday selling season ahead of us, but clearly Windows 8 did not prove to be the impetus for a sales turnaround some had hoped for."

Tablet struggles

Tablet sales haven't bridged the gap - although NPD's data is limited, as Microsoft hasn't given it sales data on Surface for Windows RT. Without the Surface, tablet sales made up only 1% of Windows 8 sales - which Baker described as "almost non-existent".

However, aside from Surface, few other Windows 8 tablets have actually hit store shelves. In the US, Baker said the Asus Vivo Tab and Samsung Ativ were both on sale, but he admitted sales could be stunted by lack of inventory and high prices, with those tablets priced at $599 and $649 - a tough sell against low-cost Nexus and Kindle devices as well as the most recent iPad, at $499.

It's not all bad news. "The strong performance of Windows 8 notebooks with touchscreens, where Windows 8 truly shines, offers some reason for optimism," he added. "These products accounted for 6% of Windows 8 notebook sales at an average price of $867, helping to re-establish a premium segment to the Windows consumer notebook market."

However, that was one reason sales weren't better - alongside a limited number of products, prices were still high. "The fact you got anybody to spend that much on any product is pretty good," he said.

"The Windows 8 ecosystem needs to find ways to get average selling prices on notebooks down onto the $699, $599 price ranges. And then we’ll see significant pick up, I believe."

Windows 7 competition

Windows 7 may also be holding back Windows 8. The new OS grabbed only 58% of Windows-based device sales for the month; in the four weeks after Windows 7 arrived, it secured 83%.

"There’s still an awful lot of Windows 7 devices out there, in most cases they’re going to be priced a little bit lower than the Windows 8 devices, and a lot of consumers are going to pick something that’s a little more comfortable versus something that’s newer," Baker said. "Until you flush out the old inventory, it’s hard to know whether bad sales are because of Windows 8 or because the PC market isn’t performing as well as it has in the past."

He disputed previous reports that PC sales were being held back as consumers waited for Windows 8, saying that pattern was a myth. "It was never true, it has never been true," he said. "I’ve been doing this for 15 years, and I’ve never seen that – certainly not when you have products coming out after the back to school season.

"The back to school buyer doesn't have any choice to buy something by the middle of September, they can’t wait until some new thing comes out at the end of October. They need something new."

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