Microsoft: Windows 8 launch hurt by ‘limited assortment’ of touch devices

Computer makers have known for a long time that Microsoft’s Windows 8 would attempt to move the PC operating system much further into the world of tablets and touch-screen devices. So why weren’t there more touch-screen Windows 8 machines available for consumers when the new OS launched?

That’s one of the lingering questions following Microsoft’s earnings report yesterday.

Revenue in the Windows division was a highlight for the company, rising 11 percent without counting Windows sales that were deferred from previous quarters because of accounting rules related to Windows 8 upgrade promotions. However, speaking with analysts about the results, the company acknowledged that the launch was affected by the inability of computer makers to meet consumer demand for touch-screen notebooks and tablets.

Peter Klein,  the company’s chief financial officer, said on a conference call that the “consumer segment was the most impacted by the ecosystem transition as demand exceed the limited assortment of touch devices available.” Klein described the situation as a lesson learned, and a sign of the potential for Windows 8 as more touch-screen devices hit the market.

Later, he elaborated in response to a question, “We learned a lot about the types of experiences and scenarios and to some extent the price points the customers are looking for from their devices. We saw some really great demand for some of the touch devices that we brought to market. In some cases, we didn’t have the supply that we needed to satisfy that demand.”

Maybe it is a good sign for the future, but it also seems like a missed opportunity for Microsoft and its partners to make a larger splash right from the start. How many of those consumers that were looking in vain for Windows 8 touch-screen devices bought iPads instead?

Peter Klein, Microsoft CFO.

This disconnect between Microsoft and PC makers is not a new phenomenon, and it’s one of the main reasons that Microsoft came out with its own Surface tablet. But that competition from Microsoft also may have discouraged some PC makers from moving ahead aggressively with touch screen machines of their own. Microsoft didn’t disclose Surface sales figures during its report yesterday, but said it has sold more than 60 million Windows 8 licenses so far.

In one sign of the impact, the NPD market research firm reported in November that Windows consumer sales were down 21 percent since the Oct. 26 launch, not including Surface sales. The firm cited demand for touch-screen Windows 8 machines as one bright spot, with an average selling price of $867 “helping to re-establish a premium segment to the Windows consumer notebook market.”

Will the release of the Surface Pro help Microsoft turn things around? Starting at $899 without a keyboard, it’s looking like a tough sell, and by definition it’s positioned for business users, not consumers.

Bottom line, the underlying demand for touch-screen notebooks is not a bad sign for Microsoft and its partners in the long run. However, once again, they’ve put themselves in the position of playing catch-up.

  • guest

    It’s easy to be snarky, but the truth is we need MS to be really successful to keep Seattle healthy and thriving. Here’s hoping they pull out a win.

    • Guest

      Sure, but people didn’t buy shitty cars just to keep Detroit healthy and thriving either. MS better come up with something truly convincing. So far this cannot be said for Windows 8. I personally wish it was good, but I find myself despising it with a surprising passion (I just can’t get over the fugly tile concept with the pathetic 8-bit colors, sorry).

      • http://www.facebook.com/jasondouglasfarris Jason Farris

        I think the only thing wrong with Windows8 is the baked in fruity colors of the native apps. Functionally, it’s awesome. The theme choices are too restrictive.

        • Guest

          I think on a desktop functionally it’s a UX disaster. For example, you think shutdown under SETTINGS in charms is an improvement?

          • http://www.facebook.com/profile.php?id=100001080966933 Walden Gajo

            The reason being, with a tablet in mind perspective, you technically don’t have to turn-off or reboot your device unless required by an update or something else. A tablet oriented device can just be put to sleep when pressing the power button or a button on your keyboard.

          • Guest

            Fair enough, but why on earth would I want this on a desktop? Hence my point earlier, on a desktop it’s a UX disaster.

          • guest

            Faster boot. Better performance, security, multi-monitor support, task manager. Hyper V. Storage spaces. Reset/Refresh. The list goes on and on. If you’re primarily a desktop user who isn’t interested in touch, the Metro UI is basically the W7 start button on steroids. Integration of the new and old could have been more elegant from a UI/UX perspective on traditional desktops. Not a disaster, but not as slick as on touch-based devices. But there’s still a lot of value there.

          • Guest

            I don’t think there’s really value in any of the “new” features you listed, at least not enough to overlook the disadvantages that come from upgrading from Windows 7 to Windows 8. Who needs a faster boot into no Aero, an awkward UI/UX, and fugly tiles? So Windows 7 wasn’t secure and didn’t have multi-monitor support or a task manager? I’d rather get myself a Nexu 7 tablet for $200 and keep Windows 7 than ‘upgrade’ to this desktop disaster.

          • guest

            Yeah, hardly important at all. LOL. Stick to the Nexus full time. It’s a better fit for your apparent skill level.

          • Guest

            Why do MS shills always have to resort to personal insult? Chances are I have far more formal education and experience in the IT field than you. $200 for an operating system is SO last century!

          • guest

            Why do career MS trolls actively seek out MS related news forums to post their knee-jerk comments crapping all over the company and then act surprised and whine when their efforts aren’t appreciated?

          • Guest

            And what’s it to you whether people criticize a company’s product? Unless of course you work for them.

          • Xeno’s still trolling

            Sad

          • Guest

            Ya, because there’s only one person who could possibly dislike Windows 8, right?

          • http://www.facebook.com/profile.php?id=100001080966933 Walden Gajo

            actually as an admin my life has been easier because of the tiles. I can pin all my most important apps that I need instead of running a command or browsing through the menu.
            one day…apple will get this right :-)

          • http://twitter.com/crossslide bam!

            You shouldn’t need to manually turn off or reboot a laptop or desktop either. And you don’t need to close the new style of apps manually, as their lifetime is managed by the system. That is one of the reasons there’s not a prominent X button to close them: because the designers are afraid that if there were, people would see it and think they SHOULD be closing apps manually, resulting in (a) extra work for the user and (b) extra work / slowness for the system as apps get unnecessarily rebooted. This applies equally well across tablets, laptops and desktops.

          • LOL

            Why is the fast boot time such an important feature then in Windows 8? You Microsofties crack me up.

          • http://www.facebook.com/profile.php?id=100001080966933 Walden Gajo

            it’s not a Microsoft feature per se…it’s actually an improvement on both the motherboard bios and hard drive technology with ssd. Microsoft just complemented it. If it was apple I guess it would have been revolutionary…but for the pc environment it just part of tech advancement.

          • guest

            That’s your top of mind example to make your case? Seriously!?

          • Guest

            Just ONE example, not the most critical, just a simple showcase of how out of touch the design is on a desktop. There’s plenty more examples, i.e. exiting an app by swiping down across the screen instead of simply clicking the x button. See a pattern?

    • http://geekwire.com Todd Bishop

      Hmm, I’d be curious to know where you’re seeing any snark in this post. My goal here, and in general, is to make realistic assessment of what’s going on. It’s a serious question: Why couldn’t PC makers get more touch-screen devices on the market at launch, and what impact did it have?

      • Guest

        After Sandy and now that touch-screen devices are available, what will be the excuse for Microsoft in 3 months? Or when will it ever be Windows 8′s fault?

      • guest

        Your assessment is realistic and they have put themselves in a position of having to play catch up again. That’s what badly led, badly run companies who consistently underestimate their competitors and then take years to respond do.

        The OEMs obviously could have had more touch-screen devices available at launch. But some already have Android-based tablets that are selling well. So they lack incentive to push W8 alternatives. And the others apparently weren’t convinced them could compete at those price points or that a premium market for W8-based touchscreen devices would emerge. The former is still a question mark but the latter appears to have occurred and caught some by surprise. However Intel’s supply issues is probably a constraint there. What OEMs mostly ending up doing, with their typical short sightedness, was heavily discount and dump their existing inventory of crappy low-end non-touch PCs over the holidays.

        • Guest

          The Windows 8 “launch” is the most bizarre launch I’ve ever seen. It’s not a single launch but this painfully slow, dragged out series of launches over months and months that leaves you sick of hearing about it and unclear what’s really what.

          Case in point: outiside of the Surface I’m not aware of anything out there that runs Windows 8 that I would evaluate side-by-side with an iPad or Kindle Fire. Near as I can tell the Windows 8 Tablet push died before birth. Or, maybe this is another “launch” coming in the spring?

          I’m not even sure they’re in the position to play catch up. I think they’re just down and out. In the post-PC era, the role of Windows will be as the OS that runs your cheap laptop. That’s about it.

          • Bill

            Your knee jerk repetitive bashing is tiring. Move on.

    • guest

      The last time MS was really successful was the 90′s. From a relevance, growth and competitive positioning perspective it’s been failing ever since. That’s just been masked somewhat in the numbers because money has continued rolling the three cash cows established then, but even that’s coming to an end in the post PC era where MS is a <5% player. There are plenty of companies who have already taken up the slack during MS's decade plus competitive decline. And they'll pick up the rest as MS continues its ongoing suicide.

  • GG002

    Yeees, that’s what I’ve been saying too. I was deciding between buying a new laptop with some funky touchscreen functions (like Yoga or the Dell one), or to buy a Surface RT and keep my old PC. I decided on the latter, since the new laptops were very limited in capacity and availability.

  • http://twitter.com/ryanisinallofus Ryan Ray

    Limited options wouldn’t matter if any of the options were truly good.