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Monday, February 4, 2013

Microsoft\'s Reller Talks Windows 8 Sales

The introduction of Windows 8 did not restore growth to the personal computer business over the holidays. Microsoft, though, says the product is just getting warmed up.

In an interview on Friday, Tami Reller, the chief marketing officer and chief financial officer of the company’s Windows division, said Microsoft was pleased with the progress of Windows 8, the most significant overhaul of the company’s flagship operating system in decades, although she delicately sidestepped questions about whether the product’s performance has fallen short of expectations in the PC industry.

“This is a generational change, and to try to evaluate sucess over one finite amount of time when you have that much change, I think, is tricky,” Ms. Reller said, sitting in a conference room on Microsoft’s verdant campus in Redmond, Wash. “I look at it and say, wow, it was a tremendous amount of innovation we brought to market. Is there more we can do Oh, my goodness.”

One of Ms. Reller’s clearest messages was that a wave of compelling new Windows 8 devices is about to come out. To emphasize the point, she and Aidan Marcuss, principal director of Windows Research, arranged a dozen or so new notebooks, tablets and “convertibles” (hybrid devices that combine features of both) on a long conference table. Mr. Marcuss held up a sleek new ThinkPad tablet from Lenovo that runs on an Intel processor that operates without a fan and is designed to provide generous battery life.

Microsoft executives have conceded that Windows 8 PC sales could ha! ve been better over the holidays had more devices with touch screens been available on store shelves. Although the product works with a traditional keyboard and mouse or trackpad, it was designed with the idea that touch screens would become a common feature of computers.

Microsoft’s own research on how people are using Windows 8 shows that people with touch devices spend 4.5 times more time using apps downloaded from the Windows Store than those without touch screens.

Ms. Reller said that Microsoft had certified about 1,000 systems for use with Windows 8 by Oct. 26 and that the number is now about double that. She said the percentage of those devices with touch screens was “well below half, but it’s growing.”

“We’re really only just getting started,” said Ms. Reller, who has co-led the Windows business with Julie Larson-Green since the departure of Steven inofsky, the former president of the Windows division, in November.

Microsoft said last week that it had sold 60 million copies of Windows 8 by the end of 2012 â€" about equal to the sales level of Windows 7, an earlier version of the operating system, at the same point in its life. While shipments in the PC market as a whole declined over the holidays, Microsoft had the advantage of being able to sell upgrade copies of Windows 8 to people who already had computers.

When asked how declining PC sales affect the outlook for Windows 8, Ms. Reller said that at some point, it wouldn’t be as meaningful to look at those numbers to judge the health of Windows since the software also ships on tablets, which many research firms do not include in their estimates for the PC market.

“Over time, it will be more interesting to look at the Windows business and say, ‘How are you doing in the broader opportunity’ ” she said.