Initial Windows 8 PC sales estimates 'mixed,' say analysts

Analysts are mixed, while some are skeptical on Windows 8 sales and Surface tablets in the first fortnight of sales. Is this what Ballmer meant by "modest" sales?
Written by Zack Whittaker, Contributor

Windows 8 and Surface sales are "modest," according to Microsoft chief executive Steve Ballmer. Of course, only he truly knows what the figures are currently looking like, but some analysts are skeptical that even "modest" might be an overstatement.

On the whole, however, it appears that most analysts remain optimistic knowing full well that it's still early days.

Pacific Crest analyst Brendan Barnicle said he checked in with 16 North America and German PC retailers to find that 75 percent had met or reached beyond expectation in terms of sales, up from 59 percent during the same period after Windows 7 was first released.

Surface sales, however, were nothing to shout home about. In discussing with Microsoft retail store representatives, Surface sales were "in line with expectations," but that all of the stores had to "[restock] Surface inventory more than once." That said, there was a "downtick in demand for Surface." 

He believes in spite of Microsoft's move to build 3-5 million Surface tablets for this quarter, Microsoft may sell only 1.5 million Surface units for the December quarter.

Barclays hardware analyst Ben Reitzes is cutting his market estimates from this year through 2016, giving a stark warning that the PC market "could decline for many years to come." The PC market at the moment is "blind" to the post-PC revolution, particularly those without a smartphone or tablet on the market.

Regarding HP, he sais: "We are cautious on HP's PC segment given secular pressures, share losses, market confusion over ultrabooks and Windows 8, and a slowdown in markets like China." While the global economy is the main reason, "market confusion" over Windows 8 must hurt Microsoft to the very core.

And then when he does note Dell, Windows 8 will not save the company's ailing business -- which according to IDC figures, the firm lost 14 percent in market share quarter-on-quarter between Q2 and Q3 2012. He says while federal government spending on PCs is up, it's not enough to counter-balance the loss in revenue from the post-PC market.

We see tablets encroaching on PC sales in education and financial services verticals in particular of late [...] With respect to Win 8 tablets, we do not believe that Dell will see meaningful traction.

Cowen analysts Gregg Moskowitz surveyed more than 1,200 consumers between pre-order and Surface delivery times, and found that 64 percent of existing PC owners had not heard about Windows 8 by the time it was launching. Out of that, 32 percent saw Windows 8 favorably, while 18 percent less so. 

Roughly two-thirds of the respondents do not plan on buying a PC over the next 18 months. Also, our study indicates Apple [Mac] and MacBook computers could take as much as 42 percent of the combined consumer PC/Mac market. This is concerning for [Microsoft], as Windows 8 likely won’t be enough to slow Apple's PC momentum.

He also noted that Ultrabooks "[do not] appear likely to have a material market impact" at the moment, with less than 20 percent of consumers willing to spend more than $600 in the next year-and-a-half on a new PC with an Ultrabook.

(via Barrons: 1, 2)

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