Windows 7 driving enterprise PC sales, but Apple's new iPads expected to again hurt PC growth
Enterprise demand for PCs running Windows 7, Microsoft's previous-generation operating system, is currently boosting the overall PC market, but sales are expected to once again take a hit after the introduction of Apple's new iPad Air and iPad mini with Retina display.
Apple's new iPad Air. | Photo: Daniel Eran Dilger
In its quarterly earnings report on Thursday, Microsoft revealed that though Windows revenue was down 7 percent year over year, the overall PC market seems to have stabilized. Analyst Maynard Um of Wells Fargo noted to investors on Friday that this stabilization has been driven by demand from businesses rather than consumers.
That demand from enterprise is "being driven by Windows 7 refresh," according to Um, who said that Microsoft's previous-generation operating system is now running on more than 75 percent of desktops. That suggests that enterprise adoption of Microsoft's latest flagship operating system, Windows 8, has not been strong.
On the consumer side of the PC business, Microsoft indicated to investors that it's hopeful that competitive pricing on laptops this holiday season will help sales rebound. However, Um said he doesn't believe price is the primary issue in the current PC market.
Despite current signs of stabilization in PC sales, Um is not convinced that the trend will continue --?thanks, in part, to Apple's newly announced iPad Air and Retina iPad mini.
"The introduction of new Apple products and other competitively priced tablets could adversely impact consumer PC sales," he said.
The rise of so-called "post-PC" devices, like Apple's iPad, has caused a dramatic shift in the personal computing space. Though Windows remains the dominant platform on traditional computers, Microsoft has fallen behind in the growing tablet space, with some data suggesting Microsoft's share of overall personal computing sales has plummeted from 90 percent to 33 percent over the last five years.
Apple's new iPad Air. | Photo: Daniel Eran Dilger
In its quarterly earnings report on Thursday, Microsoft revealed that though Windows revenue was down 7 percent year over year, the overall PC market seems to have stabilized. Analyst Maynard Um of Wells Fargo noted to investors on Friday that this stabilization has been driven by demand from businesses rather than consumers.
That demand from enterprise is "being driven by Windows 7 refresh," according to Um, who said that Microsoft's previous-generation operating system is now running on more than 75 percent of desktops. That suggests that enterprise adoption of Microsoft's latest flagship operating system, Windows 8, has not been strong.
Enterprise customers are more interested in Microsoft's Windows 7 platform than Windows 8, according to Maynard Um of Wells Fargo Securities.
On the consumer side of the PC business, Microsoft indicated to investors that it's hopeful that competitive pricing on laptops this holiday season will help sales rebound. However, Um said he doesn't believe price is the primary issue in the current PC market.
Despite current signs of stabilization in PC sales, Um is not convinced that the trend will continue --?thanks, in part, to Apple's newly announced iPad Air and Retina iPad mini.
"The introduction of new Apple products and other competitively priced tablets could adversely impact consumer PC sales," he said.
The rise of so-called "post-PC" devices, like Apple's iPad, has caused a dramatic shift in the personal computing space. Though Windows remains the dominant platform on traditional computers, Microsoft has fallen behind in the growing tablet space, with some data suggesting Microsoft's share of overall personal computing sales has plummeted from 90 percent to 33 percent over the last five years.
Comments
Windows 7 driving enterprise PC sales, but Apple's new iPads expected to again hurt PC growth
Windows 7? So much for Windows 8, unless it's a typo.
Guess they're having to upgrade hardware & OS due to the end of XP support, etc.
But, but, but... Windows 8 was supposed to be a substantial upgrade... Surface was supposed to kill iPad... Microsoft TV was supposed to be popular... XBox was supposed to make money... Windows Mobile was supposed to be the next generation of smartphones... Metro UI was supposed to be cool... Windows 8.1 installation was supposed to be flawless... Zune was supposed to lunch iPod...
Not-news: iPad [B]expected to[/B] hurt PC growth
One happened, the other is a prediction.
Windows 7 driving enterprise PC sales, but Apple's new iPads expected to again hurt PC growth
Windows 7? So much for Windows 8, unless it's a typo.
Guess they're having to upgrade hardware & OS due to the end of XP support, etc.
Not a typo. Enterprises, especially larger ones, don't jump on OS upgrades in the early days. My company (100K+ Employees) has been upgrading all our desktop and laptops to Win 7 this year, by year end is the target.
I anticipate that is what is happening. We shall see what 2014 looks like.
LOL - that looks like a type-o, but it's not, and it's hilarious.
Enterprise demand for PCs running Windows 7, Microsoft's previous-generation operating system, is currently boosting the overall PC market
Meaning an outdated operating system is boosting PC sales?!
This is really a take home message for the Windows 8 developers. Oh dear has it come that far with M$ already.
NB. Tried out the new release of Numbers and I am impressed. The speed gain to the previous version is mind blowing. Leaves Excel for the first time behind.
So far Excel was my first choice when ever I had to do spreadsheet calculation and data visualization with really huge data sets. Otherwise I already preferred Numbers because of it's superior layout capabilities.
It seems MS-Office's days on my Mac's are dwindling.
Since the ability to run MS-Office used for many people to be the main argument to possess a PC rather than an iPad, makes Microsofts position in the near future very weak.
Microsoft's profits are up 17% so they're obviously doing something right. The company has a lot of problems but it's easy to overlook the fact that they're still a highly profitable organisation.
Chromebook is a new netbook.
Meaning an outdated operating system is boosting PC sales?!
This is really a take home message for the Windows 8 developers. Oh dear has it come that far with M$ already.
NB. Tried out the new release of Numbers and I am impressed. The speed gain to the previous version is mind blowing. Leaves Excel for the first time behind.
So far Excel was my first choice when ever I had to do spreadsheet calculation and data visualization with really huge data sets. Otherwise I already preferred Numbers because of it's superior layout capabilities.
It seems MS-Office's days on my Mac's are dwindling.
Since the ability to run MS-Office used for many people to be the main argument to possess a PC rather than an iPad, makes Microsofts position in the near future very weak.
Numbers is not there yet.
Some simple sorts are missing or do not work simply.
Charts do not come close to Excel.
Apple just gutted AppleScript without saying anything? That's irresponsible.
Have you tried using iWork in iCloud collaboration mode?
My wife loves the new Pages. All she said this morning is great! great! great! Lol.
But she hated the new safari because of no cover-flow History.
Microsoft's profits are up 17% so they're obviously doing something right. The company has a lot of problems but it's easy to overlook the fact that they're still a highly profitable organisation.
They're making money from all the wrong things. Certainly not from mobile, which is what the industry is all about today. And that's not limited to just phones.
They're profitable in all the wrong areas. Still living off the Windows/Office cow in this day and age is unacceptable. Which is why they've been making money, but also looking completely idiotic in all the areas that matter in today's market, apart from catering to the IT/non-consumer sector.
They're making a profit, yet they're nowhere in mobile. You can make a profit selling rubber dogshit and still be doing all the wrong things vis-a-vis the competition. MS completely shit the bed in mobile, and their core Win/PC biz is being slowly phased out. This is where all the profit-from-the-wrong-things has brought them: a gradual slide into irrelevance, amid leaner and meaner competition.
Chromebook is a new netbook.
Good God, no!
Microsoft's profits are up 17% so they're obviously doing something right. The company has a lot of problems but it's easy to overlook the fact that they're still a highly profitable organisation.
Wait until more and more people realize, how much faster it is to learn to use iWorks and how much quicker you are with iWorks to bring your data into a presentable form. I predict within the next year ( unless MS changes dramatically their Office Software {pricing included
}) people will start leaving MS-Office behind like rats a sinking ship and then even more people will migrate to tablet computers because of their superior mobility and longer battery life.
Ah, how to spin a news article, to focus on the parts you want to hear - about a company that just reported excellent strong results (yet again) - although it was supposed to die several years ago - according to the more biased Apple insider comments.
~~Reuters) - Microsoft Corp cruised past Wall Street's quarterly profit and revenue forecasts on Thursday, helped by strong sales of its Office and server software to businesses, sending its shares up more than 5 percent after hours.
Too many people here don't seem to get that yes, Microsoft makes more money from business than consumer sales - so isn't visible on the consumer orientated blogs - that's not a crime, it's just a different business model!
To the person who said, 'what a mess'... well sorry, but you clearly know very little... Microsoft is a growing, profitable company that operates across an incredibly diverse set of business areas.. a core strength as this allows investment in emerging or low share markets today that drive new profits and solutions tomorrow. Yes, it's in a tough fight in Tablets and phones... but its a company with the resolve and resources to keep fighting and gain share steadily over time...
Yes, Microsoft like pretty much any company has made plenty of mistakes and certainly does not dominate the 'personal computer' (device) market as once it did - but then neither does Apple dominate tablets or phones as they did only three short years ago (a good thing as active competition drives all to innovate and offer better value to customers - both commercial and consumer).
So, don't really know why I'd expect informed and educated discussion on a blog comments column - but for those with an interest in reality and balance, don't believe the hype and/or vitriol that some choose to post... look a little deeper and judge each company on their total business... Google, Apple and Microsoft are all fantastic companies with great skilled people and massive resources.. its great for us all, that their going to fight to win share by improving their products... and doe some like Microsoft- they also have a great B2B & cloud business that you may not think matters to you as a consumer .. but almost certainly enables everything from your shopping trip to the bank that helps you pay for it.
Yes..they sell because they're cheap. If they're expensive, people will buy PC instead.
Quality post. IBM is still around. Microsoft too can be around for a long time.
But for a part in bold please educate yourselves with this excellent article:
http://ben-evans.com/benedictevans/2013/10/24/ipads-and-self-selection