
Explaining Windows 8 PC Sales Over the Holidays - Pr0
http://winsupersite.com/windows-8/explaining-windows-8-pc-sales-over-holidays
======
jpxxx
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
This is typical of winsupersite.com.

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Joeri
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.

~~~
MrFoof
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.

~~~
Joeri
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.

~~~
meaty
Why the fuck do I want to touch my laptop (or phone or whatever to be honest).

It gets dirty and stops working, you end up with curled up hands, even the
best ones wobble like an old person when you push on them, you can't type on
the things as they are completely non tactile, the touch resolution is so bad
that all you can do is finger paint badly, doesn't work with gloves on, and
everything is not designed forbthe touch screen apart from metro which is just
fucking horrible and the list goes on.

Its like fixing a watch with jacket potatoes on your hands.

I've tried every touch device out there and they are abhorrent productivity
saps.

I want a laptop with a normal screen.

I am actually the majority non-consumer of media opinion - you know the people
who use the machine to do work.

The only reason we have touch screens is hype

~~~
corporalagumbo
An anecdote: I've been using my iPad everyday since I bought it. Laptops and
desktops much less so (though mainly because I don't have a good work set-up
atm.) Recently I was on my Macbook and someone called me on Skype. Incredibly,
it took me around four seconds of prodding the "answer call" button on screen
with my finger before it struck me that I wasn't working with a touchscreen!

Anyway, I'm sure that won't answer all of your objections, and while I agree
with you in principle - about screens wobbling for instance - I have to reject
your claim that a touchscreen laptop is totally useless. At the very least,
with a well-thought out new interface paradigm, you gain small-to-medium
boosts in everyday productivity while losing nothing in base functionality.
You only add a new interaction option while taking away none of the previous
mouse-and-keyboard functionality. That's why nobody is proposing taking away
keyboards from touchscreen laptops - because clearly physical keyboards are
better than touchscreen keyboards. So your argument about touchscreens being
bad for typing are moot, because everybody is going to just use the keyboard
in that instance.

I do see a lot of use for touchscreens on laptops in the sort of situation I
described earlier - pushing large, clear buttons on screen. This is actually a
case where current laptops are miserably unfunctional. Even on a plush,
responsive trackpad such as a Macbook's, remotely manipulating a small cursor
from one arbitrary spot onscreen to another arbitrary spot and clicking is
very inefficient. Being able to simply reach out and tap the screen on the
exact spot is much better. This use-case for touchscreen laptops could become
even more widespread if popular software begins to follow Microsoft's design
cues with large, clear buttons.

~~~
meaty
The problem is that all user interface paradigms that work with touch are
fundamentally incompatible with a keyboard and vice versa.

Can you operate IOS from a keyboard entirely? No.

Can you operate windows from a keyboard entirely? Yes.

Can you operate windows 8 from a keyboard entirely? No.

The paradigms are so disparate it's unreal and they will never work together
without massive compromise.

The MacBook touchpad is only so large because its impossible to use the
keyboard to drive OSX. Its a crutch. However it easier to position with a
pointing device than a finger on its own as you can scale movements.

Metro is shit - in typing this on a lumia. Its horrible but my other half is
on Facebook on my Lenovo t61 (she uses only the keyboard and clitmouse which
is incredibly accurate with some practice). Nokia 6303 is in the post.

~~~
corporalagumbo
Hmm.

1) I'm not sure that I agree with you that touch and keyboard/mouse don't mix.
Perhaps nobody's come up with a good mix yet. At the very least, what is to
stop us from writing software that recognises when input modes change and
shifts to suit the new mode? We can write responsive websites that shift to
fit different screen sizes.

2) Maybe you can't operate W8 from a keyboard, but you can operate it a hell
of a lot better than iOS. At least Microsoft tried to make something that
works with both. In Metro you can select tiles with the keyboard arrow keys,
search with the Windows key, go to desktop, switch apps, all with keyboard
shortcuts.

3) Perhaps the paradigms seem unreal and disparate at the moment, but is that
any reason to give up on a future where interfaces are fluid, responsive and
seamless across multiple devices and input modes?

4) I agree with you that it is easier to position a pointing device with a
trackpad. But that's the whole point of a touchscreen - you don't need to
position a pointing device. Rewrite the apps to make them larger and finger-
friendly, and forget pointing devices. If you want total accuracy just plug in
a mouse. You can do it with the Surface, so what's the problem?

5) I have a Lumia 800 too, and I quite like it. I don't think it's good enough
for Microsoft to become a real competitor to Android and iPhone, but I
definitely don't think it's crap. Anyway, it doesn't mix interfaces at all -
Metro on Windows Phone is touch only. So, why don't you like it?

------
jacquesm
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.

~~~
kenjackson
_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.

~~~
bjustin
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.

------
tmchow
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.

~~~
mtgx
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-...](http://betanews.com/2009/07/22/apple-has-91-of-market-
for-1-000-pcs-says-npd/)

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.

~~~
kenjackson
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.

------
diminish
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.

~~~
ComputerGuru
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.

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

~~~
spiralpolitik
In the consumer space yes, its going to get ugly for MS very quickly.

In the enterprise space not so much, at least not for a few years. Most
companies just finished their migration from Windows XP to Windows 7 so were
expecting to sit out upgrading to Windows 8. So plenty of time for Microsoft
to right the enterprise side of things.

That said if they don't have a compelling solution for the enterprise when the
time for upgrades does come then its probably game over for them. The smart
move would be for them to separate the consumer and enterprise lines so that
the rot in one doesn't take the other down. Sadly I think Balmer's hubris is
going to prevent that from happening so I can't see a way out of the
inevitable downward spiral unless he gets shown the door.

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mikecane
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).

------
isarat
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.

------
bugsbunnyak
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.

------
corporalagumbo
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.

~~~
rayiner
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.

~~~
corporalagumbo
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...

------
vamur
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.

------
Toshio
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.

~~~
dasil003
I get the poetic justice part, but explain how netbooks shipping with Linux
would have kept them relevant?

~~~
Toshio
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.

~~~
raverbashing
Yes, but

Shipped versions of Linux were simply AWFUL

Even Ubuntu "netbook edition" was terrible! It needed a good video card to run
(and compatible drivers, etc) meaning it was a crapshoot.

What MS could have done is kept licensing Windows XP for them, which was good
instead of "Vista" and then 7

So yes, if I get a netbook I'm customizing my linux installation, because
default ones are bad.

~~~
justincormack
Ubuntu netbook was pretty decent compared to the shit that came with them.

