Windows 8 PC orders weak, says analyst

Sales at Asian firms that assemble PCs for HP, Dell and others show lower expectations for Windows 8 pop

Computer sellers have scaled back their expectations of the sales pop they'll get from Windows 8 this year, according to an analyst.

Brian White, of Topeka Capital Markets, said that his checks of Asian computer manufacturers -- the relatively unknown firms that build desktop and notebook PCs to specifications issued by the likes of Hewlett-Packard and Dell -- found that orders last month climbed by less than half the average of the last seven years.

"With all of the sales numbers out for our ODM Barometer, October sales rose by 2 per cent month-over-month and below the average performance of up 5 per cent over the past seven years," White said in a note to clients earlier this month. "This is weaker than our preliminary estimate of up 5 per cent month-over-month in October and speaks to the continued challenges in the PC market."

White's ODM Barometer - ODM for "original device manufacturer" - is a metric of sales by the Asian companies that assemble PCs for brand-name computer sellers. It does not show sales of those PCs to buyers, but hints at the orders those computer sellers have placed for inventory.

The ODM Barometer for October was also down in a year-over-year comparison, repeating a less substantial slide in September, White said.

"The sales cycle has decelerated further into negative territory, dropping to down 13% year-over-year in October from down 9 per cent in September," he wrote. "This weakness is unusual given that PCs with Windows 8 and new ultrabook products are ramping."

PC sellers had hoped that the release of Windows 8 would kick-start sales, which first flattened, then fell in the face of still-unsettled economies and fierce competition from smartphones and tablets for customers' dollars.

It seems that computer sellers expected more from Windows 8 earlier this year, but have since rethought, said White. "Sales [by ODMs] in October will clearly be helped by the ramp of Windows 8, [but they're] much lower than the PC makers originally expected a few months ago."

His conclusion: "The macro [economic] weakness is weighing in on PC demand and the plethora of new tablets is driving more conservatism on the part of the PC makers," he said in an email reply to follow-up questions.

The result: "The Windows 8 ramp is much lower than expected a few months ago, partly related to these issues and others," White said.

ODM sales -- again, a harbinger of orders placed by computer sellers for future PC deliveries -- this year were also weak when compared to the months leading up to Windows 7's launch in 2009.

"During October 2009, sales rose a similar 2 per cent month-over-month," White added in his email. "However, the three prior months [then] were much stronger than July, August and September of this year."

Previously, Computerworld has tracked usage patterns of Windows 8 in the months leading up to, and including, the Oct. 26 launch, and found that the new operating system is being run by less than a fifth as many people as ran Windows 7 in the same months before its debut.

Although many analysts and Microsoft watchers have cautioned that it is too early to conclude that Windows 8 sales -- and by extension, those of Windows 8 PCs -- are sluggish, others, including David Johnson of Forrester and Paul Thurrott, who writes the popular "Supersite for Windows" blog and is the co-author of Windows 8 Secrets, have claimed that that is exactly what is happening.

Thurrott, who last week cited unnamed sources within Microsoft, said that Windows 8 sales were below the company's internal projections and had been called "disappointing" internally. According to Thurrott, Microsoft has put the blame at the feet of its OEMs (original computer manufacturers), the vendors that contract with ODMs to build their wares.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

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Tags Delldesktop pcshardware systemsWindowssoftwareCapitaoperating systemsPCsHewlett-Packard

7 Comments

IT_Observer

1

Windows 7 is far superior than Windows 8, the PC market is ailing due to the sheer arrogance of Microsoft to push for a product that not meet the people high expectances, this is another repeat disaster as Windows Vista was,
Is time to bring a product that people love and use most without bizarre changes that nobody want.

Kasspianna

2

The consumer is dead tired of Microsoft products that are full of holes release after release, that's why so many are still using XP that took forever to eventually make a solid platform...Only greedy companies release products that are flawed and unfinished....

Mark C

3

Sales are down becuase Windows 8 sucks the big one !!! I deal with approx 20 clients and NOBODY wants it. They hate it. We are retorfitting any new machines with Windows 7. Head out of the clouds people. OEMs are going exclusively Windows 8 blindly, as they did when Vista came alone. The first one to grow a braincell and offer Windows 7 SKUs will clean up big time !!!

SBD

4

Perhaps people remember how much of their hardware was incompatible with Win7 when released, and the poor driver support following that. Upgrading to Win8 (if it can be called UP) would again likely entail multiple hardware alterations, on top of the usual buggy release Microsoft have led us to expect.
Whether the hardware problems and bugs exist or not, its simply not worth considering when you have a computer that currently works. Let alone a new learning curve for an unproven interface. I've also learnt not to touch MS software until after the first service pack.

IT_Observer

5

I agree with Kasspianna, Windows XP is still being used in several business and government agencies, if Windows 8 price is $50 to upgrade why not offer Windows 7 for the same price until Microsoft comes up with something more useful, lets bring back the desktop and the Start menu, Windows 8 is killing PC sales.

Will

6

I'm not surprised that people are sceptical of the new OS, but I don't think that means it is terrible. A change in interface is always going to make IT managers wary, as they don't want to add re-training users into their budgets.

I think over the long term, Windows 8 will prove to be a great move by Microsoft. The PC market is being eroded by the tablet/byod market and they are moving with the times.

dawesi

7

Funny how this article is rehashed with EVERY windows release since 3.1.1, including XP, Vista, Win 7 and now windows 8.

Please go and get a journalism degree, then come back and write real articles that you haven't plagiarized from other people

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