Microsoft Windows 10: OS launches in 12 days, but what about falling PC sales?

With 12 days to go for the **launch of Windows 10** , PC manufacturers have been witnessing a significant downfall in the sale of hardware. That’s not entirely desirable if you have the most important operating system release a few weeks away! In fact, when a closer look at the PC market uses descriptions such as ‘sales declined’, ‘ **worse than anticipated** ’, ‘ **worst-ever sales year** ’, ‘ **slump continues** ’ and similar words have become almost synonymous to the PC market over the years. Yes, the PC market has shown year-on-year decline and 2015 is no different. According to a Gartner report released this month, “Worldwide PC shipments totalled 68.4 million units in the second quarter of 2015, a 9.5 percent decline from the second quarter of 2014. This was the steepest PC shipment decline since the third quarter of 2013. PC shipments are projected to decline 4.4 percent in 2015.” [caption id=“attachment_274410” align=“aligncenter” width=“640”] Preliminary Worldwide PC Vendor Unit Shipment Estimates for Q2 2015. Image: Gartner[/caption] In a conference call with analysts, AMD CEO Lisa Su said, the consumer PC market was “decidedly lower” than expected. In a report in the Venture Beat, Su is quoted as saying on Thursday, “The softer-than-expected consumer PC demand in advance of the Windows 10 launch caused our original equipment manufacturer (OEM) notebook sales to slow late in the quarter as our OEM customers and retailers actively worked through their inventory of Windows 8-based systems. This significantly impacted our second quarter PC notebook sales and reduced our gross margin as we ended the quarter.” [caption id=“attachment_261403” align=“aligncenter” width=“640”] Microsoft is also looking at the Surface very closely.[/caption] According to the Gartner report, Acer is the worst hit, plummeting by 20.2%. It is worth noting, however, that Microsoft will enable Windows 7, 8 and 8.1 systems to upgrade to Windows 10. In light of this, it is interesting that hardware sales are slumping despite the fact that the existing inventory will be eligible for an upgrade to Windows 10. This trend points towards two factors. First, there being a lack of clarity on the future with Windows 10 as perceived by consumers; and second, the need for effective communication that existing inventory would also be able to upgrade to Windows 10. (Also read: **Key features of Microsoft's Cortana** ) Recently, OEMs such as Dell and HP were also in the news with statements that laptops and PCs will be available with Windows 10 on launch day. Dell CEO Michael Dell tweeted out this Dell will be ready with Windows 10. https://twitter.com/MichaelDell/status/620721456893132800 In the offer disclaimer on Dell’s webpage for Windows 10, it mentions, “Windows 7 devices must have SP1 installed and Windows 8 and Windows 8.1 devices must have Windows 8.1 Update installed. Additional hardware and software requirements apply and will be further communicated. Windows 7 Enterprise, Windows 8/8.1 Enterprise, and Windows RT/RT 8.1 are excluded from the offer. Not all Windows 10 features will be available for use on all qualifying devices. Devices must be connected to the Internet and have Windows Update enabled. ISP fees may apply.” Well, “Not all Windows 10 features will be available for use on all qualifying devices.” According to Microsoft, its voice assistant service Cortana will be available only in United States, United Kingdom, China, France, Italy, Germany, and Spain. Given that analysts have predicted a fall of close to 5 percent in global PC shipments in 2015, it seem the best way to increase the user base for Windows 10 is to enable the free upgrade. Meanwhile, on the issue of declining sales, Su and OEMs such as Acer have expressed hope that sales would pick up post launch of Windows 10. Some analysts also believe that this is bound to change, and one can expect slow yet steady growth in 2016. Su reportedy said she expects business to pick up in the second half of the year, with hopes on the release of Windows 10. Moreover, it is believed that  **Windows 10** launch scheduled for third quarter of 2015 is creating a self-regulated inventory control, and this so-called halt will resume once Windows 10 is out. However, there are some others who believe that nothing can possibly save the PC market, not even Windows 10, and it is destined to doom. Also, let’s not forget, Microsoft’s Satya Nadella himself has been positioning the upcoming Windows version as ‘mobile first’. Moreover, PC vendors haven’t been able to differentiate themselves like Apple. For now, only Mac sales show some growth, but only in the global market. Microsoft recently said it expects **one billion device** s to run **Windows 10** in two years. However, the company hasn’t broken down the distribution according to device categories. Gartner prediction claims more than 422 million devices (desktops, notebooks, tabs and phones) will ship with Windows this year. So, Microsoft would require to double sales between 2015 and 2016, and again in 2017. However, these are magical numbers and may not necessarily turn out as desired. It should be noted that the company sold 34.9 million phones in 2014. Currently, it seems like the perfect example of Catch-22. A free upgrade impacts PC sales; while PC sales by itself, would make it difficult for the future of the PC platform.