Windows 8 and PC Sales: Chicken and Egg
November 30, 2012 by Douglas A. McIntyre
Widely regarded research firm NPD Group released data from its Weekly Tracking Service that showed that PC sales have fallen, compared to last year, since Microsoft Corp.’s (NASDAQ: MSFT) Windows 8 was released. The group reported:
The consumer Windows PC and tablet market didn’t get the boost it needed from the launch of Microsoft’s Windows 8 in the U.S. Since the Windows 8 launch on October 26, Windows device sales have fallen 21 percent versus the same period last year.
Much of the media and many experts blame a lack of enthusiasm for the new operating system, which some say is not enough of an upgrade from earlier versions to drive demand. But that theory could be completely incorrect. The NPD report the research firm says as much:
“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. “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.”
However, a 21% drop is severe.
If lack of popularity is not to blame, two other things are. The first is that Windows continues to have a small part of the mobile OS market, and that market is where the rapid growth of computing devices continues to be. Smartphone and tablet sale rates are so far ahead of personal computers that Wall St. has battered the shares of Dell Inc. (NASDAQ: DELL), Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD) and Hewlett-Packard Co. (NYSE: HPQ), although the HP decline has other causes. The other side of the smartphone migration is that traditional PC sales will continue to fall. No matter how well-liked or well-reviewed Windows 8 has been and may be in the future, nothing can turn the tide that has moved so powerfully against the devices that were at the core of business and personal computing for more than three decades.
The second cause may be the simplest to describe and understand. A slow economy may have interrupted the normal upgrade cycle of PCs for both business and personal use. PCs are “better” than in the past because processing power is now high enough for most needs. A slow cycle is supported by a product that has a longer “shelf life” for users.
Windows 8 could be the best operating systems in the world. However, that cannot bolster sales if the economy or trend toward smartphones and tablets continues.
Douglas A. McIntyre
Smart Investors Are Quietly Loading Up on These “Dividend Legends”
If you want your portfolio to pay you cash like clockwork, it’s time to stop blindly following conventional wisdom like relying on Dividend Aristocrats. There’s a better option, and we want to show you. We’re offering a brand-new report on 2 stocks we believe offer the rare combination of a high dividend yield and significant stock appreciation upside. If you’re tired of feeling one step behind in this market, this free report is a must-read for you.
Click here to download your FREE copy of “2 Dividend Legends to Hold Forever” and start improving your portfolio today.