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Don't blame free Windows 10 for PC business ills

Gregg Keizer | June 2, 2015
Microsoft's decision to give away Windows 10 upgrade isn't a factor in continued contraction, says IDC analyst.

PC shipments will continue to contract during 2015, but it won't be the fault of the Windows 10 free upgrade, research firm IDC said today.

"It's all about how you look at it," Loren Loverde, an analyst at IDC, said in an interview today. "The first half of this year is much more negative than the second half, and in 2016, things should stabilize more than in the past four years. So in a sense, Windows 10 is definitely contributing to the PC market."

IDC's latest forecast -- the first since November -- predicts a 6.2% downturn for the year, about three times that of 2014, for the fourth straight year of declines. OEMs (original equipment manufacturers) will ship 289 million personal computers this year, a drop of about 7 million from the prior projection.

"But the free [Windows 10] upgrade reduces the need for a new PC, and IDC expects many consumers will continue to prioritize spending on phones, tablets, and wearable devices like the Apple Watch during the holiday season," IDC said in a statement accompanying the new forecast.

Loverde clarified that today.

"There's more of the history and cycles that we didn't put in the [press release]," said Loverde. "What's lost is that while Microsoft has traditionally been so closely tied to the PC market, it misses the point that the market is moving to mobile devices."

In other words, the fact that Microsoft will give away a Windows 10 upgrade to consumers and many small businesses for one year after the public launch of the OS won't be a factor, or at least one that will matter, given the traumatic downturn in PC shipments and the rapid rise of mobile -- mostly smartphones, but also tablets.

"In the big picture, it wouldn't have made much difference if Microsoft had charged for Windows 10 upgrades," argued Loverde. "The more important reason for free is to integrate the installed base across the platform, move to the integrated environment and modernize the installed base. There are fringe benefits from free."

The fact that there are low expectations of Windows' impact on PC shipments is a relatively new phenomena: Historically, a new Windows OS has bumped up hardware sales -- sometimes a small increase, other times much larger -- as most customers prefer to buy a new device rather than upgrade an existing one.

That belief foundered in 2012 when Windows 8 debuted. Not only was the bifurcated OS panned, but it launched in the first year of the as-of-then-not-known contraction, coming off 2011, which was "peak PC," when manufacturers shipped a still-record 364 million machines. Meta-market conditions -- for one, the shift to mobile -- were more to blame for the lack of a "bounce" than was Windows 8.


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