Explaining Windows 8 PC Sales Over the Holidays

http://winsupersite.com/windows-8/explaining-windows-8-pc-sales-over-holidays

by Pr0 • 14 years ago

63 53 14 years ago

Joeri2• 14 years ago

I don't buy the notion that people willingly pay 700 € for an ipad (plenty of people going for a higher model), but would reject a 700 € price tag for a touch-enabled laptop.

The basic problem in my opinion is that if you spend 400 € you're ok with plasticky rubbish, but if you spend 700 € you want to have a quality product. The 700 € laptops feel just as bulky and plasticky as the 400 € laptops, so nobody buys them, especially since most of them don't even have touchscreens. The solution is not for prices to go down, it's for build quality in the sub-1000 segment to go up.

If a 499€ retina ipad can feel great in your hands, then there is no excuse for the fact that the cheapest windows 8 touch laptops that feel nice in your hands have 4 digit price tags.

officemonkey• 14 years ago

My sister and I bought my mother an iPad mini instead of Nexus 7 or Kindle Fire. I knew it was more expensive, but I wanted to make sure that my 70-year old mother was going to have a positive experience, and I knew that I could provide her with support for iOS device based on my knowledge of the iPhone and iPad.

Meanwhile, I built a new PC and installed Windows 8. And it's a clusterfuck. They're so insistent on forcing the Metro UI on me, and it is so disorienting, that it took me 10 minutes to find the "normal" Windows desktop. The welcome to Windows 8 walkthrough was useless.

Folks who just want to use Windows will be pissed. Folks who want an iPad experience will be underwhelmed.

Frankly, I'm very happy with Windows 8 under the hood, I just don't think my mom would be.

skymt2• 14 years ago

My mom recently bought a Windows 8 laptop, and she seems happy with it. She's a non-technical but experienced Windows user. Here's the entire Windows 8 tutorial I gave: "This is the start screen; it replaced the start menu. To get to the regular desktop, hit the Windows key. To get back to the start screen, hit the Windows key again. To run a program, either find and click on its tile or just start typing to search for it." That's actually all it took; she worked the rest out on her own.

I guess the ease of the transition depends on how well the user can acclimate to visual UI changes, even if the underlying interaction patterns haven't significantly changed.

kenjackson3• 14 years ago

I got my parents an all in one Toshiba for Xmas. It actually shipped with Win7, but I upgraded it to win8 before giving it to them (was much cheaper this way).

I gave them a brief walkthrough and they love it. I was surprised at how much they took to the free Xbox music streaming, as they never used Pandora in the past.

They're not power users so I told them to stay off of the desktop except for Office (I almost wish I could put RT on it). After they played with it an hour and installed a handful of apps, I asked if I could install some of their old apps and my moms response was, "I don't want mouse apps anymore". I thought that was a success.

That said I'd be hesitant moving someone to Win8 if I couldn't get 15 minutes to walk them through it. Its a strength that in 15 minutes I can make most novices prefer it over Win7, but a weakness jn that I think they may be seriously confused if I did not walk them through it.

MrFoof• 14 years ago

Actually, there is.

They have larger solid state drives (or, ugh, hard disks). They have far more memory. They have fans. They have FAR more expensive CPUs and chipsets. They have ports and other connectors. They are physically larger, so something like machining a chassis out of aluminum is more expensive because the size of those billets is much larger. You need a physically larger display. You need more backlights. You need a bigger battery. You need a keyboard and pointing device if it's not only reliant on touch. You may even need an optical drive.

The component costs are much higher. You could only sell at 700 if you wanted a nonexistent margin.

Someone• 14 years ago

Also, they have a hinge. Designing one that will not break down on normal (ab)use (lifting the laptop by the screen; lifting it by the keyboard; opening it by lifting a corner, exerting torque on the hinges, while some dirt has found its way into the hinge) is costly; making it not look ugly and/or feel crap doubly so.

If you look at it, a tablet is about as cheap as it can get: CPU, memory, flash, display, battery, and 3 or 4 physical switches. The only real room for improvement I see is to get rid of all connectors. That means wireless charging, and Bluetooth audio, only. I am not sure the technology is ready for wireless charging (can it be made small enough?), though, and it probably would take a S. Jobs to sell the market Bluetooth only audio.

Joeri2• 14 years ago

Hard disks don't increase the price tag over 16 gb ssd, memory is cheap. The fans, ports and connectors are all in the 400 € machines, so they obviously don't add much to the price tag. Larger display, ok, but how much more could a 13" standard-res touchscreen cost when retina ipads have 10" touchscreens? The case doesn't have to be aluminum to feel nice, there are plenty of plastic phones and tablets that feel nice that prove this for me. You don't need an optical drive. The only price drivers i see are the battery and the chipset, and possibly an ssd instead of a hard disk. I don't buy the story that you can't build nice laptops for 700€ when the BOM cost of the retina ipad is less than 300€.

Anyway, there are sub-1000 touchscreen machines that are nice, like the dell xps 12, but its obvious the vendors consider touchscreens a premium feature. They're wrong. Laptops no longer have the luxury of not shipping with touchscreens, at any price point. Even apple gets this wrong, something which amazes me. Imagine someone trying to sell a tablet with a trackpad instead of a touchscreen. The very idea is ridiculous. Every reason you want touch on your tablet also applies to your laptop.

dasil0033• 14 years ago

It's actually pretty amazing and brilliant how Apple pivoted on the whole computer marketing spec battle with the iPad marketing. Whereas PCs are always compared on specs, Apple took advantage of the new form factor to sell the pure experience and relegate specs to the back-seat. Of course this would have backfired if iPads felt underpowered, but they didn't. An obsession with user experience and the ability to control the full stack of hardware and software made this possible in a way that traditional manufacturers had no means to compete with. Google and Samsung and (hopefully) Microsoft are now managing to claw their way back after years of playing catch up, but the iPad launch was pretty incredible. I wonder if it will go down as the high water mark and Apple's greatest achievement.

r00fus2• 14 years ago

> They have fans.

This is not a feature, it's a downside. Why should I care if this pushes up their BoM and reduces their margin?

mtgx2• 14 years ago

They are already trying that, with what they are calling "ultrabooks". That's the best the PC manufacturers can do right now, and a lot of them are pretty close to the Macbook Air.

But that hasn't helped their sales. It's only a niche market, and I think they've only sold like 25% of the amount they proposed to sell in 2012, as far as ultrabooks go:

http://semiaccurate.com/2012/10/02/a-year-on-ultrabooks-are-...

rayiner2• 14 years ago

The only one that's really close to the MBA, and arguably beats it in several ways, is the Samsung Series 9. None of the other ones hit all the high points of the MBA: battery life, thinness, weight, build quality.

r0s• 14 years ago

Agreed. Current laptops are simply overpriced. Apple deserves credit for really raising the bar on quality. When I can't get a notebook with a screen in parity resolution to my phone for less than $1000USD, the market is skewed.

From the article:

> Now consumers expect to pay next to nothing for a Windows PC

This is a correction in inflated prices.

diminish2• 14 years ago

Removing the Apple-centric cruft, the article is right about price perspective for win8 consumer laptops.

For orporate/enterprise use, the story is albeit different, Win8 is too novel for the ITs to start migrating when everybody already -unwillingly- upgraded to win7 from winxp. In 2 years, Windows 9, will have a better corporate chance. The underdogs such as business tablets, ChromeOS and Linux based PCs have a small chance in corporate area too.

DeepDuh• 14 years ago

I don't agree that this is Apple-centric. Putting together ARM tablets, notebooks and desktop computers, Apple now has a considerable market share and you have to include them in any market analysis.

ComputerGuru• 14 years ago

It's not "too novel," it's too radically different and tailored/designed for purposes perpendicular rather than parallel to the needs and interests of their core userbase. What does Windows 8's new UI offer the millions of workstations Microsoft wishes it to be deployed to that isn't a setback/obstacle to productivity? Employees don't need that change, and the IT managers most definitely won't be quick to recommend a radically-overhauled OS they are not intimately familiar with.

diminish2• 14 years ago

yes, your analysis makes more sense than mine. tough years ahead for microsoft, as everyone smells already.

tmchow2• 14 years ago

Some interesting points made in the article, most prominently the argument that the low price point of Win7 netbooks changing consumer expectations of how much a PC should be and what the quality is.

However, I don't agree that PC prices have to come down to make Windows 8 a success. I believe the main reason why Win8 PC sales are low is because we haven't seen very many touch based laptops at all. Take a look for yourself and see if you can find one you'd buy ignoring whether you like win8 or not.

There are only 3 currently available touch laptops a sane person would consider:

- Lenovo Yoga - Acer S7 - Lenovo X1 carbon touch - Asus UX31a Touch

So despite the typical advantage Windows has had in the past with a Tom of breadth in make and models, its just not the case at this point with Win8 touch laptops.

If OEMs pump out more high quality touch laptops, we will see sales spike. Prices don't even have to come down.

mtgx2• 14 years ago

All of those machines are over $1,000. Looking at the history of Windows PC's vs Macs, Apple has always dominated that $1,000+ market. Microsoft has no chance with devices at over $1,000, and they have increasingly smaller chance at the $500-$999 market, too, because of the iPad and also Android devices. This is not just a theory. It's happening right now, and these holiday sales show it, too.

I think Microsoft only has a short window of opportunity in the sub $500 market, but that one is rapidly being eaten by Android, and the fact that (regular) Windows licenses cost $100-$200, and that Windows machines need expensive Intel chips to run properly (especially for the more "bloated" x86 programs), their future isn't looking too good there either.

PC sales "growth" is not going to come back, and so far Windows hasn't made a big impact in the touchscreen market (or so called "post-PC" market) yet, so I expect Microsoft's Windows business to be on a decline from now on, and the decline might happen faster than anyone is expecting. The same goes for Intel (Otellini was smart to get out now).

EDIT: @kenjackson - I can't reply to you it seems, but Apple owning the over $1,000 market is not that new. This is from 2009:

http://betanews.com/2009/07/22/apple-has-91-of-market-for-1-...

It also seems the average price of Windows notebooks used to be $700 back then. Now it's under $500. I don't think the average price for Windows notebooks is going to go back up again.

kenjackson3• 14 years ago

Apple dominating the $1000+ market is a relatively new phenomenon. EDIT: By relatively new I meant the past decade. All my laptops in the through about 2002 were $1200 Windows laptops. I suspect the crossover happened probably around 2005.

This article explains the Surface pricing. MS wants the ASP that Apple gets. Unfortunately there's no way to get ppl to walk into a best buy and spend $1300 on a Lenovo Carbon, when there is a $400 ASUS right next to it (but isn't touch screen).

The genius of the Apple Store (and the Apple model in general) is that there is no low end laptop to compete against their line.

tmchow2• 14 years ago

All those PCs are over $1000 and none of them are hands down winners (although the uX31a Touch has been reviewed very well). I believe many PC buyers would pay a premium for a windows PC if it deserved it. IOW, not all PC buyers are looking for cheap, sub $500, PCs.

Take me for example. I have an iPhone and an iPad but have all Windows PCs. I just prefer them. I can afford a MacBook but don't want one. I'd happily pay $1400+ for an amazing win8 touch laptop. But since none exist yet, I'm ok the sidelines waiting.

bugsbunnyak• 14 years ago

I am a little puzzled because the two Best Buy stores close to my house were seemingly sold out of almost every Win8 laptop after Christmas. Though I suppose this could be explained as Best Buy reading the tea leaves well and intentionally understocking.

mikecane• 14 years ago

There was hardly anything on sale with Win 8 during the holidays. I think it's too soon to assign any reason until "everything" is out there and then sales are measured. Despite Asus unveiling a bunch of stuff back in late October -- like the dual-screened Taichi -- just about none of it got into stores in time for the holidays (their RT tablet did, but I doubt anyone who wants Windows will settle for RT).

jacquesm• 14 years ago

Let me explain it in one paragraph:

The sales weren't there because people didn't buy the product. The era when anything that MS put out was an instant success is over. Now someone needs to go tell Ballmer that the bar has been raised. Beware of flying chairs.

dasil0033• 14 years ago

But what does Ballmer know about product? He's a sales guy through and through. He'll never take his game face off publicly, but I'm sure he realizes privately that it needs to be better. The problem is he has neither Jobs' taste nor Gates' technical instinct. Obviously it's the people in the respective companies that actually do the work, but the CEO sets the culture. If you wonder Microsoft has become infamous for nasty infighting and a disastrous brain drain, look no further than Ballmer's personality and credentials.

kenjackson3• 14 years ago

The era when anything that MS put out was an instant success is over.

When was that era? The same year MS shipped Win95 they also shipped BOB.

XP and Vista both started slowly and of course ME never sold well.

The difference now isn't that Win8 isn't an instant success, but rather there are other products that are.

The underlying difference is that Win8s competition are actual competitors rather than simply the previous version of Windows.

r00fus2• 14 years ago

Win2k was a pretty nice OS for it's time. Microsoft was still hitting on all cylinders despite flops like ME.

Figures, it's when BillG handed the reins over.

bjustin• 14 years ago

Windows 7's success throws people off. I would guess that XP's age (and Vista's perceived flaws) lead to an unusually large number of tech-savvy people quickly upgrading to 7. The same people would encourage others to upgrade as well, if only for the security benefits. Windows 8 does not give the technically inclined as much reason to upgrade. And as you say, Windows 8 has actual competition, among them the much simpler to use iPad.

Toshio2• 14 years ago

Netbooks were originally intended to ship with Linux pre-installed, but to microsoft that meant letting consumers have an actual, real choice, and ballmer wouldn't have any of it (am I the only one who remembers a ms-asus join-venture site about netbooks called itsbetterwithwindows.com?) Anyway, netbooks stopped shipping with Linux preinstalled, which caused them to quickly nosedive into irrelevance.

TL;DR microsoft should have left the netbook market alone. They didn't. Fast-forward a few years, and it's biting them in the ass.

Justice exists.

lake_rogue• 14 years ago

How does this hurt Microsoft? If everyone is tossing their netbook every 6 months, doesn't Microsoft get them to pay the Windows licensing fee more frequently?

wazoox• 14 years ago

Of course I can't draw definitive conclusion from a couple of cases, but the 3 linux netbooks I've bought in 2007/2008 are still in use. And AFAIK my mother's 2008 aspire one only recently failed afer 4 years of heavy use.

dasil0033• 14 years ago

I get the poetic justice part, but explain how netbooks shipping with Linux would have kept them relevant?

Toshio2• 14 years ago

Linux would have kept netbooks relevant by keeping them usable. It turned out netbooks are powerful enough to run a browser, an IM app and a few widgets, but as soon as you throw AV software on top of that, they screech to a halt.

jbellis• 14 years ago

Note: the Google Chromebook (a netbook by any reasonable definition) is Amazon's top-selling laptop. http://news.yahoo.com/netbooks-crash-burn-amazon-best-sellin...

isarat• 14 years ago

If people are still using Windows XP there's no surprise in the slow sales of Windows 8 because Windows 7 rules the PC and now the new changes are supposed to be in the tablet form factor though there are enormous improvements in the core operating system but people hardly care about it.

It's too early to say but I believe, at least the first version of Surface is a failure.

jpxxx• 14 years ago

So unit sales are down and margin is down and Windows' perceived value is down and the new touch paradigm isn't adding perceived value and the app store revenues are barely calculable but we shouldn't call Windows a flop because it might go back to the way it was when it was being firesaled on garbage low-end netbooks that further degraded the mainstream PC experience if the industry would just cut those fat cat 4% margins further. K.

sounds• 14 years ago

This is typical of winsupersite.com.

vamur• 14 years ago

Plenty of people are buying Chromebooks and Nexus devices. In fact both Samsung and Acer Chromebooks are out of stock and Nexus devices are obviously out of stock. And of course, Apple owns the $1000 and above market. So obviously fewer people are willing to pay Microsoft premium for the dubious upgrade to Startrek interface.

corporalagumbo4• 14 years ago

I think Thurott is asking the wrong questions here. He says that Windows machines are too expensive - that Microsoft needs to retreat from its tactic of seeking a higher ASP. But the elephant is the room is clear - Apple manages to sell truckloads of laptops with a far higher ASP - and with no touchscreens to boot. Why are people willing to splash out for an Apple machine, but not for Windows? I think the answer is clearly prestige. For people like us, when we choose a new computer, we tend to buy sausage over sizzle (which is not to say that the allure of sizzle isn't lost on us.) So we're willing to spend fairly large sums of money on either Apple or Windows machines, whichever lets us do what we want to do best. We're educated, we're willing to research and understand the relative advantages and disadvantages of different OSes, different laptops, custom-built desktops, different components, etc.

Naturally the vast majority of consumers are nothing like us. They know little to nothing about computers, and because there are so many options out there in computers, they feel extremely anxious because they have no idea how to choose one. As a result, they buy sizzle, because sizzle makes them feel less anxious about buying something. Who has the best sizzle? Apple. Are Apple products really the best? Doesn't matter - Apple makes their customers feel safe spending money. If you hear non-tech literate people talking about computers, who are they talking about nine times out of ten? Apple. Or maybe Android. Windows? No. Touchscreen laptops? No. Not even the best new W8 models - eg. the Yoga. They're there in the shops, the ads are on tv, but no normal people are talking about them. They're all busy talking about the iPhone 5, or the iPad.

Microsoft's selling strategy - a rough-around-the-edges OS sold on hundreds of different OEM machines, 95% of which are pretty crappy for all sorts of different reasons - bad build quality, shitty trackpads, rubbish battery life, bloatware, poor customer support - has ruined their reputation among consumers. The stain of generic, confusing, quality-agnostic OEMs has polluted their brand. All the time Microsoft was busy selling whatever crap people would buy, Apple was selling only a handful of carefully-chosen products. Apple sold less in the short term, but their restraint is paying off massively now, because they never polluted their brand. They still have a brand they can sell. Microsoft doesn't, except for Office maybe.

The neat thing about how Apple's strategy works is that their lower-priced products don't compete with the rest of their range. Consumers don't buy iPod Touches instead of iPads, or iPads instead of Macbooks. Kids buy iPod Touches, which is as much as they can afford, and then their iPod Touch makes them aspire to buy an iPad. Then they buy an iPad when they can afford it, and again they aspire to a Macbook. Apple protects its high-end products well. Importantly, at every stage, at every income point, consumers are willing to prioritise buying an Apple product. Even iTunes and the App Store help Apple skim the cream off consumer's disposable income. It's a great system, with desirable, non-competitive products at every price point.

All the while computer stores are filled with masses of generic Windows boxes, competing against and drowning out some of the better, less-generic models - and nobody really cares. Microsoft has rushed right into its next-generation OS, launching it on as many different PC models as possible, trying to accelerate its app ecosystem to life as quickly as possible. I personally think Microsoft should have taken it slower, though maybe things will improve over time - Microsoft has a knack for persistence. I can however see Microsoft trying to do too much too soon, missing the opportunity for a real refresh, perpetuating the same problem of appearing try-hard and incoherent to consumers, tainting it app store with prolonged early irrelevance, failing to create a splash which a next-gen OS could have made, and giving Apple plenty of opportunity to watch and learn.

Thurott's advice is to drive for even-lower prices - polluting an already tainted brand even further. I would argue the opposite is necessary. Microsoft needs to cut the cruft, somehow, take its time, dial back its strident "look how great we are!" marketing, and develop some real, quiet, unforced confidence. If you're quiet and confident, and its clear you respect yourself, you don't need to run around trying to get people's attention. People will pay attention to you, given time. Patience pays off. That's the lesson of Apple I think.

That's why I think Ballmer is not a great CEO. He never quits yelling about how great Windows is, how everything is fine in Microsoft land. There's no humility.

rayiner2• 14 years ago

Microsoft needs to do its own hardware, and it needs to copy Apple's focus on the fundamentals as much as possible. I think Surface RT really gives you a glimmer of what's possible, but they made some mistakes with it. On one hand, the industrial design is there. It's a beautiful product, light, thin, and doesn't look like a rip-off of an Apple product. The guts have some key design mistakes (Tegra 3 just isn't up to the task, a $500 tablet with a Retina screen is inexcusable), but that's something they can fix in the next revision. On the other hand, they're not copying Apple enough. Surface RT has a great pitch: it'll run Office. That's it's fundamental feature. Given that, it should have been perfectly executed. Instead, it shipped as a desktop-mode app with some touch facilities grafted on, and it shipped with performance problems that all the reviewers noted (even if it was somewhat alleviated with a later patch). Apple never would have shipped a product where the #1 feature of the device was so unpolished. Shipping late would've been far preferable to shipping "on time" with a product that further damaged the brand.

corporalagumbo4• 14 years ago

I think the problem at this point is that Microsoft seems to be interested in only one thing: winning. People don't care for companies that no longer care about making great products, and just care about beating the people threatening their turf by making great products themselves...

Explaining Windows 8 PC Sales Over the Holidays

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