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?
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.