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Thursday, November 29, 2012

Research Firm Says Windows 8 Had a Rocky Start

For much of the week, Microsoft has been trumpeting the strong start of Windows 8. On Tuesday, Tami Reller, chief financial officer and chief marketing officer for Windows, told investors that Microsoft had sold 40 million licenses to the operating system during its first month on the market. Steven A. Ballmer, Microsoft's chief executive, promoted that figure at the company's annual shareholder meeting on Wednesday.

But on Thursday, NPD, the retail sales tracking firm, published data that painted a darker picture of the Windows 8 introduction.

Unit sales of Windows PCs in retail stores in the United States fell 21 percent in the four-week period spanning Oct. 21 to Nov. 17, compared to the same period the previous year, according to the firm.

NPD said sales of Windows 8 tablets had been “almost nonexistent,” accounting for less than 1 percent of all Windows 8 device sales. NPD collects sales data in weekly increments, so the week of Oct. 21 was the first in its system to include sales of Windows 8, which went on sale on Oct. 26.

The figures suggest that Windows 8 did nothing to arrest the downward trajectory of the PC business, much less lead to a rebound in a market that has been struggling for some time. “It hasn't made the market any worse, but it hasn't stimulated things either,” Stephen Baker, an analyst at NPD, said in an interview. “It hasn't provided the impetus to sales everybody hoped for.”

There are a few things to keep in mind about what NPD does and does not count in its figures. The firm tracks sales to customers in most, but not all, American retail stores. In other words, it tracks actual consumer demand for products - in this case, Windows PCs.

Microsoft's 40 million figure, in contrast, represents copies of Windows that Microsoft sells to all of its customers. That includes some consumers but more often it reflects sales to the hardware makers that install Windows on their ma chines, some of which have not yet been bought by consumers.

Microsoft's figure also includes sales to people who are buying the new operating system to upgrade existing PCs, along with sales to business customers that don't happen at cash registers in stores, which NPD doesn't reflect. Typically, though, new versions of Windows are adopted most quickly by consumers, so it's not clear that the inclusion of the business market would show a positive direction for the PC business.

It's possible also that Black Friday, which was not included in NPD's figures, provided a jolt to PC sales.

The Windows 8 debut looks like it had much less of a positive impact on PC sales than did its predecessor, Windows 7, which went on sale to the general public on Oct. 22, 2009.

At the time, NPD said that unit sales of Windows PCs rose 49 percent during the first week Windows 7 was on sale, compared to the same period the previous year. Mr. Baker said he wasn't able to pro vide sales data for the first four weeks of Windows 7's availability for a more complete comparison to Windows 8.

The PC business in 2007 had much stronger unit sales than it has now, in large part because of a boom in the low-cost laptops known as netbooks. Fast forward to 2012, and sales of netbooks have nearly vanished, replaced by surging sales of the iPad and other tablets.