Windows 8 Fails to Ignite Holiday PC Buying

   By Steven D. Jones 
 

Microsoft Corp.'s (MSFT) Windows 8 didn't exactly ring in the New Year for PC makers.

Sales of Microsoft-powered notebook PCs fell 11% in the five-week holiday-selling season, according to research firm NPD Group. Windows 8 was released Oct. 26.

The report is based on weekly data gathered from large consumer retailers such as Best Buy Co. (BBY), Wal-Mart Stores Inc. (WMT) and retail websites, but it excludes sales of the company's Surface tablet computer and other devices sold at Microsoft stores and websites.

Windows 8 "did little to boost holiday sales or improve the year-long Windows notebook sales decline," said Stephen Baker, vice president of industry analysis at NPD Group.

Microsoft declined to comment. In late November, the company said it had sold 40 million Windows 8 licenses, which included those sold to hardware manufacturers and consumers.

Notebook unit sales fell about 11% over the Black Friday shopping weekend and remained at that level through the period ending Dec. 22. Average selling prices for Windows notebook PCs were $420, up $2 from the same period a year ago.

By comparison, the average price for Apple Inc.'s (AAPL) MacBook rose $100 to $1,419, largely from the added cost of the company's new Retina Display on many models, Mr. Baker said.

A similar retail survey ended in November found selling prices for all Windows PCs, both desktop and notebook models, had climbed to $477. The average price for desktops and notebooks through the holiday selling period fell to $430. Prices "always trend down because of aggressive discounting" during the holidays, said Mr. Baker.

Windows 8 has a touch-screen interface for tablets and PCs as well as a traditional keyboard and mouse interfaces. Microsoft executives and PC makers have said they don't expect a fast start for Windows 8 because many touch-screen devices aren't in the market yet.

Touch-screen notebooks made up 4.5% of Windows 8 sales with selling prices around $700. Sales of Windows notebooks under $500 fell 16%, while sales of notebooks over that price increased 4%.

Microsoft's own Surface tablet debuted with Windows 8 software on Oct. 26 at a price of $499. The next version of the Surface tablet running Windows 8 Pro aimed at business users will appear soon and sell for $899 to $999, plus about $120 for the attachable keyboard that is a major selling point of the current Surface RT model.

One reason the Pro version of the device will be more expensive is that it uses a PC-style chip from Intel Corp. (INTC), part of a family of chips that sells for between $177 and $225. The Nvidia Corp. (NVDA) chip typically used in the Surface RT model costs about $28, according to an estimate by research firm UBM TechInsights.

Write to Steven D. Jones at [e-mail]

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