The PC puzzle: does the sales drop implicate or justify Windows 8?

Gartner has joined IDC in releasing figures showing a steep drop in PC sales for the first quarter of 2013.

Worldwide PC shipments totalled 79.2 million units in the first quarter of 2013, an 11.2 per cent decline from the first quarter of 2012, according to preliminary results by Gartner, Inc. Global PC shipments went below 80 million units for the first time since the second quarter of 2009. All regions showed a decrease in shipments, with the EMEA region experiencing the steepest decline.

says the release. In EMEA the decline was 16%. In the US, the decline was only 9.6%, but marked the 6 consecutive quarter of decline.

Gartner does not give worldwide figures for Apple, but says that its shipments grew by 7.4% in the US, which is a particularly strong market for Apple, giving it an 11.6% market share.

One bright spot for Microsoft:

Unlike the consumer PC segment, the professional PC market, which accounts for about half of overall PC shipments, has seen growth, driven by continuing PC refreshes.

That will please the folk at the event I am attending right now, the Microsoft Management Summit in Las Vegas, which is about managing servers, PCs and other devices in the enterprise. The consumerisation of IT is real, and so is Bring Your Own Device, but never underestimate the extent to which Windows is embedded in business.

Still, does the overall decline prove that Windows 8 was a huge mistake, and that Windows/Microsoft is now set for long-term decline?

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Not necessarily. There is another way to look at these figures, which is that Microsoft was correct to conclude, back when Windows 8 was planned, that tablets and touch devices would erode the traditional PC market, and that it had to take the risk of reshaping its desktop operating system accordingly.

It is plausible, even likely, that PC sales would not have declined so fast if Windows 8 had been less radical. On the other hand, the long term cost of not reshaping the Windows UI for touch, nor introducing the app store model of software deployment, would probably be greater.

Put another way, the Windows 8 experiment means that PC sales may eventually stop declining, whereas without it they would continue to trend download, even though the curve for this last quarter might be less shocking.

Even if you accept this reasoning, you can still argue that the Windows 8 tablet personality is so poorly executed that it cannot compete with iOS and Android devices. Most Windows 8 users live on the desktop, even those with touch screens and tablets. I am seeing a lot of Surface Pro here in Vegas, with users loving its portability, performance, and elegant keyboard cover, but I see it being used like a laptop, not like a tablet.

Microsoft undoubtedly made mistakes in the initial release of Windows 8, the biggest problem being that the Windows Runtime side, which supports the tablet personality, was rushed out and is really not finished. Creating excellent and good-looking apps is harder than it should be, which is one reason why there are so few.

  • The Windows 8 experience for new users, especially those with long familiarity with earlier versions, is so poor that many prefer to stick with Windows 7. A few tweaks and compromises would have made this easier.
  • Windows RT, the ARM based edition which runs only “Modern” apps and Office, is spoilt by poor performance as well as the lack of good apps. The absence of Outlook from Office in Windows RT spoils its for the business market, where it is potentially attractive as a cost-effective, secure tablet operating system.
  • Microsoft’s OEM and retail partners do not seem to know how to sell Windows 8.

When I put these points to some Microsoft folk informally here at MMS the answer I got was “Blue will make you happy.” Blue, according to these guys, is not the code name for a new version of Windows. Rather, it is a process of incremental updates which users will get automatically. It is well-known of course that significant Windows 8 updates are on the way, and builds have been leaked.

Windows 8 has made a bad start, but it is not all bad. The desktop side (which is what most of us use most of the time) improves on Windows 7, and it is plausible that a combination of user learning along with updates that make the transition to the new Start screen less jarring will make adoption easier.

Equally, the Windows Runtime side will get better. I expect to see new and improved components for developers building apps, and better reliability and performance. Outlook is rumoured to be coming to Windows RT, and at some point we may also see versions of Office applications appear in the Modern UI.

Windows RT will have a tough fight with Intel-based tablets, but users will win either way, since next-generation ARM chipsets are much faster and Intel is making great strides with low-power, high-performance chipsets of its own.

Incidentally, Windows RT is not quite dead. I heard a questioner here at MMS ask questions about how to deploy their forthcoming purchase of a “large quantity” of RT devices.

Microsoft is at times a stumbling giant, but it is stumbling in the right direction with Windows 8, and it may yet work out. Even if by then it is called Windows 9.

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9 comments to The PC puzzle: does the sales drop implicate or justify Windows 8?

  • James Hancock

    It is both Windows 8′s fault and PC in general, but there is a huge opportunity for MS out of this.

    PCs, within the next 5 years will be used by only 2 classes of people: Designers and programmers. (Designers include CAD, video, etc.)

    No one else needs a PC. No one. The people that do need a PC almost all use Multi-monitors and need 8 cores and a ton of RAM etc. Windows 8 sucks for them because the Multi-mon experience is AWFUL. Windows Blue apparently is going to fix that. The only question is if Windows Blue will also empower apps like Photoshop and Visual Studio to be native Win RT apps. (not that it hugely matters other than to be able to remove about 90% of the code of Windows eventually).

    Everyone else needs a tablet; home server; media center (or 5) with gaming capabilities, a web browser, and some form of Windows Media Center; and a phone.

    1. Google TV is awful and doesn’t show any signs of really improving at all.

    2. Roku is highly limited, although with Plex, Bittorrent and a server it works, but you have to dance the gray side of the law, because Plex doesn’t do TV properly.

    3. Microsoft Owns the gaming console market, and if done right will own it still after PS4 and Xbox Next. Thus if they give a great medai center experience with live recording of TV etc with a great guide like they had in Windows Media Center, and all of the Windows 8 apps run so you can get netflix, amazon prime, Vudu etc. too (once those apps hit the store!) Xbox will drive Windows 8 to the living room.

    4. Once it’s in people’s living rooms, the tablet will be natural.

    5. The smart phone is a harder case for MS, but if they get much better syncing and integration with the xbox it could become a no brainer and there are strong signs that WP is making a huge impact in smartphones now. (Imagine if you could transfer your skype call from your phone to your tablet, to your xbox with a tap, or stream your TV that was recorded on your Xbox to any xbox in the house, any tablet and any phone anywhere you are in the world like slingbox. If they make this no more difficult than signing up for a Microsoft account and allow “families” to be created in those microsoft accounts so that people can share content easily and share purchased apps easily, then they’ll have a winner. Anything more difficult and they’ll have problems.

    6. Businesses aren’t going to be hell bent on iOS and Android. (more so iOS because of the PITA factor for developing for it because of Objective C). Thus MS has a huge benefit here because almost all of the cross platform development tools such as mono touch, and the gaming platforms are all built on C# and .NET. It will be easy for MS to advantage Windows devices in this game and we all know that that is how MS won the PC game in the first place.

    7. It’s more than time for MS to take over hardware. It’s more than time to get the OEMs out of the business. If they want to blow their brains out on Android, go ahead. MS needs to play like Apple. It needs to stop messing around with this though.

    If they do all of this and speed up the integration and make a seamless platform from media center, to tablet to phone, they’ll own the whole thing within 5 years and everyone else will be playing catch up. They have to do this with an open development eco-system unlike Apple but with Microsoft hardware that just works.

    If they don’t do these things, they’re toast.

  • Microsoft was absolutely right that an operating system designed for tablets and other devices would be very important, and was inevitably going to take some criticism when they made the user interface changes that were necessary for such and operating system.

    While there are some minor issues (it is not at all obvious which gest4ures should be used until you learn them(, the major problem with Win 8 is that it is simply TOO BIG for current tablet hardware. They didn’t strip the OS down nearly enough. The Surface Pro shows all of these problems. Because of the size of the OS, a 64GB Pro is the smallest model, and only about half of the is available to the user. In addition to memory, it also needs a fast processor, which makes it run hot and increases the battery size to the point where it weighs an unwieldy 2 pounds.

    Some of these issues will be fixed by more power efficient chips, but the better approach would have been to strip out all of the OS features not needed on a tablet.

  • Mark

    On a day otherwise dominated with “MS is doomed” and “W8 is a failure” headlines, your insightful analysis is a refreshing change. I think you’re right. They had to change for the long term. I suspect they realized that would have short term fallout, although they might have seriously underestimated how bad that would be. I also agree on the execution problems. In fact it’s embarrassing how many there were given how important they knew this release was. I hope Blue brings some major changes and soon. But a bigger issue for MS, at least from my perspective, is that it has to start setting the pace and making others respond. If it keeps reacting to competitors, as it has for most of the past decade, then its future is in jeopardy. They had a lot of time to watch iPhone and iPod touch and anticipate iPad. They even had a full year pre iPad when rumor of a tablet from Apple was leaking everywhere. But somehow they still managed to get caught totally unprepared, and then take another three years to respond – and even then in a less than finished or compelling fashion, which was suicidal.

  • GoodThings2Life

    James Hancock, you’re spot on with most points. So much potential, and all they have to do is execute on it.

    But that’s where it falls apart. Microsoft is just too slow in execution. It really shouldn’t take them so long to implement things.

    The only point I don’t agree on is #7 with the OEMs. I love them entering the hardware business on the “premium” side, but I still believe we need the OEMs, because businesses and consumers alike are still in a “cheap” mindset, which is why Android really dominates the smartphone world. Windows cannot afford to go “premium only” like Apple.

    If anything, I feel the market place is competitive enough that I want to see some old-school Microsoft again… go hard and aggressive the way Google has been doing with Android.

  • James Hancock

    #7 is definitely up to debate, but I would say it’s the OEMs that are debasing Windows. They’re the ones installing the crapware on Windows. They’re the ones creating flaky hardware and not updating it after they push it out the door.

    What Microsoft needs is a Senior VP in charge of UX. His or Her sole responsibility would be to unify and simplify the UX across all platforms including server side and ensure seamless integration between all of them.

    In short they need their own Steve Jobs. Since this is what I do for a living I humbly submit my name. Give me 12 months and the ability to release inband updates and I would have the whole thing simplified and fixed or at least 80% of the way there with major updates required for the rest.

    Perhaps that’s hubris, but then Steve Jobs had that in spades, and it was specifically his belief that his way was the right way and the market agreeing that turned Apple around and save it and it is specifically that lack at Apple now that is signaling its second death.

  • The problem I see with the PC industry is more about the PC makers and less about Microsoft. I think the PC market is evolving and slowly morphing into something different and people need to be more patient. Bear with me here, when you look a futuristic movies, lets say its set in 2050. You tend to see tablet devices and other very small technology. If you see a Dell OptiPlex 790 sitting on someone’s desk, you would say that the movie is whack. We expect this type of change to take place, all of us do; yet when it’s starting to take place we whine like babies. Sorry folks we can’t have it both ways, it’s the price of evolution.

    Now on the other hand, it’s annoying to me when I watch PC manufacturers sit idle and let Microsoft take all the blame for the PC market while the sit on their asses and do nothing. Most of the crap they are selling is why the PC market is declining. Plastic, poorly made devices at higher prices than what the should be. When these boxes of crap don’t sell they blame it on windows 8. (sorry Acer, if the shoe fits…Lenovo doesn’t agree with you.)

    The decline in the PC industry stems from spoiled/greedy PC vendors wanting their cake and yours too; just like spoiled children, they cry and whine when the don’t get things their way.

    Microsoft does have things to fix in windows 8/RT, but it’s working well in our organization and no one seems to be complaining about the OS much. (except for the hardcore/old school that complained when we left windows 3.11 for workgroups)

    Lastly, the PRESS is doing no one in the PC industry any favors with their constant DOOM-A-GLOOM articles, which in most cases has no basis and no supporting documentation. (Welcome everyone the “BLOGGER” is born with a way to create FUD and not have to be responsible for what they write. All the big companies have them, perhaps because they are cheaper to employ than a “REAL” writer…Just saying.)

    Okay, I’m off my soap box. Thanks for listening/Reading.

  • Hmmm… Designers and Programmers will use PCs only?

    I’d just like to say I hate gaming on consoles and I’ll play them on my Surface Pro (when NZ finally gets them) out of shear convenience only. 80% of the time I’ll be on my desktop with a dedicated 3gb vid card, 16gb of RAM, and triple flat screens… I won’t be doing that with a tablet anytime soon. So you missed one in that list :P

    Back on point… I think Microsoft did what they had to do but the execution has been disappointing. It can and will improve as history has shown before. Personally as a gamer, designer and developer… I love Windows 8. I enjoy the ‘fast and fluid’ modern UI, and the convenience of the desktop. It’s what I need from Windows moving forward. iOS for example is not convenient, it just is, sigh.

    I’m excited about the future of computing… But a bit less of the doom n gloom and biased reporting of ‘actual numbers’ would be a nice change.

  • James Hancock

    Jeremy: As with every statement there will be exceptions, but the vast majority of everyone not in the Graphics and Programming sector will not use a PC by 2018. And by vast majority, I’d say it will be close to 90% of Desktops will be gone entirely and people will be using some form of Surface or other convertible tablet with keyboard.

    The only sector that might stay the same otherwise are secretarial workers. They might need it for the same reason that graphic designers and programmers will need them. (and in general anyone that types a lot unless by then we have accurate brain wave readers)

  • Katie

    I honestly don’t care about their long term plans, the future of PC’s, or where gaming is going…. All I know is that a lot of stuff doesn’t work on my new laptop because of Windows 8. It takes a lot of time just to figure out a ‘fix’ for everything. What a piece of crap, if I had know I never would have bought this thing.