Microsoft Corporation (NASDAQ:MSFT) launched its new Windows 8 operating system in the fall, and the focus of PC companies during the third quarter was to jettison Windows 7 inventory to make room for the new-fangled creation from Redmond. However, it seems that the new OS actually didn’t produce progress in PC sales during the holiday season. And part of that may not be blamed on the OS, but the hype seemed to come up flat.
Tech market analyst firm IDC reported that global PC sales were down more than 6 percent in the fourth quarter compared to a year ago. In the U.S., PC sales were down 4.5 percent in the quarter and 7 percent for the year. “Although the third quarter was focused on the clearing of Windows 7 inventory, preliminary research indicates the clearance did not significantly boost the uptake of Windows 8 systems in Q4,” said Jay Chou of IDC.
In its analysis, IDC cited several reasons for the decline. Two that were cited were a relative failure of vendors to market the new Microsoft Corporation (NASDAQ:MSFT) OS successfully and to build the hardware to take full advantage of the functionality and capability. “Consumers expected all sorts of cool PCs with tablet- and touch-optimized capabilities,” said David Daoud, IDC research director. “Instead, they mostly saw traditional PCs that feature a new OS (Windows 8) optimized for touch and tablet with applications and hardware that are not yet able to fully utilize these capabilities.”
And with a lack of touch-capable hardware, vendors lost other ways to sell the OS. “Lost in the shuffle to promote a touch-centric PC, vendors have not forcefully stressed other features that promote a more secure, reliable and efficient user experience,” Chou said.
Have vendors caught up yet? And how did specific companies break out? Did they all suffer losses?
There has been talk this week at CES in Las Vegas that several vendors have now developed hardware that is more compatible with Windows 8, though they might not hit store shelves for weeks or even months. So Microsoft Corporation (NASDAQ:MSFT) may see its retail sales of Windows 8 continue to lag for a while until the hardware market is fully caught up.
Not all is lost in the PC market, though, as at least three companies saw growth in sales during the holiday quarter. Segment leader Hewlett-Packard Company (NYSE:HPQ) put out a stable 15 million units during the quarter, while Lenovo and ASUS saw solid growth. Lenovo recorded 14.1 million units sold, an increase of more than 8 percent, and ASUS rose more than 5 percent to 6.5 million.
The biggest downturns were experienced by Dell Inc. (NASDAQ:DELL) and Acer. Dell dropped nearly 21 percent to 9.5 million units shipped, and Acer took a 28-percent tumble to 7 million units. IDC noted that Dell was hit by a lot of competition, while Acer was relying on heavy Windows spending that didn’t come to fruition, as much of the consumer spending on computers went to non-Windows tablet devices.
Does Microsoft Corporation (NASDAQ:MSFT) get a failing grade for Windows 8, in your opinion? What do these numbers say to you, and what do you think they mean for Microsoft and its OEMs in the future? We’d love your thoughts on the company, this story or the stock in the comments below.
DISCLOSURE: I own no positions in any stock mentioned.
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