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A press release from Dealnews.com crossed my desk last week and explained how there were now “Insanely good laptop deals, with Ivy Bridge laptops at better-than-Black Friday prices.” The reason? Sluggish sales for Microsoft’s Windows 8 OS, which is apparently well-suited to touchscreen devices like tablets, but a real non-starter for laptops and desktops.

Windows 8, which got off to a terrible start, was running well behind the adoption curve for Microsoft’s ill-fated Vista OS as of late December. By early January, it was obvious that Windows 8 had not provided the expected push to desktop and laptop computer sales that major PC manufacturers (Samsung, Asus, HP, Dell, etc.) had hoped for during the holidays.

According to the Dealnews story, Microsoft has cut the licensing fee for Windows 8 to just $30 from $120 for computer manufacturers in an attempt to drive sales. Intel has also cut the price of Ivy Bridge CPUs, driving the costs of Windows 8 laptops down to record lows. As an example, Dealnews cited a laptop with Win 8 and 15” display for just $299 that was available earlier last month.

Finding anyone who uses or likes Windows 8 has been a difficult task. At the Hollywood Post Alliance Technology Retreat this past February, I asked the 550+ attendees – who work in movie production and post-production, broadcast, cable, telecom, and related industries – how many were running Win 8. I spotted maybe five raised hands at most, or less than 1%.

Colleagues have actually bought aftermarket programs to launch Windows 8 from a Windows 7 interface – that’s how silly things have become. But they’re not laughing these days at Dell Computers, which owner Michael Dell is trying to take private.

Running a touchscreen OS on a notebook isn't the same thing as running it on a tablet...

Running a touchscreen OS on a notebook isn’t the same thing as running it on a tablet…

In an SEC filing that was reported on earlier last week by The Verge, Dell cited several reasons why investors may not see expected returns in the future. Among the long laundry list of culprits was this one: “…the uncertain adoption of the Windows 8 operating system, unexpected slowdowns in enterprise Windows 7 upgrades and the increasing substitution of smartphones and tablets for PCs…”

Across the Pacific Ocean, Samsung’s Jung Dong-soo, director of the company’s flash memory business, likened Windows 8 to Vista, saying “The global PC industry is steadily shrinking despite the launch of Windows 8. I think the Windows 8 system is no better than the previous Windows Vista platform.”

A long-time friend from my grade school days has worked in the high-tech IT sector in Seattle (Amazon, Atlas Publishing, et al) for decades and is intimately familiar with the trials and tribulations of Microsoft. When I sent him the Dealnews story, he responded with these comments: “Yow. It really is going as so many of us thought. My head of IT/Ops got a laptop with (Windows 8) on (it), spent a weekend working on it, finally gave up and put (Windows) 7 on it.  One of my best engineers had to Google how to turn off a laptop with (Windows) 8 on it.”

I was one of those Luddites who refused to let go of Windows XP (Service Pack 3) for years. But XP has been cast adrift, so last fall, I upgraded both my desktop and my wife’s old desktop to Windows 7, which I have had running on a Toshiba laptop for three years with excellent results. And I see no reason to change that any time soon. Apparently, a vast majority of PC and laptop owners agree.

The real problem Microsoft has isn’t Windows 8. There are rumors that an upgrade called “Windows Blue” will be in stores in August, just in time for back-to-school sales. No, the issue is the market shift away from desktop and laptop PCs to tablets, a market where Microsoft is way behind and frantically playing a game of catch-up behind Apple and Android-equipped devices.

Intel’s aggressive push of ultrabooks, super-thin notebooks (no hard disk or optical drives, just flash memory) that run the Win 8 OS, has shown little in the way of results. Ultrabook shipments for 2012 were less than half of what was predicted earlier in the year.

In the meantime, tablet sales continue to skyrocket, with 190 million predicted to ship in 2013, blowing by PCs for the first time according to research firm IDC. Google’s Android OS is expected to take a 48.8% market share among tablets this year, with Apple’s iOS running right behind at 46%. That doesn’t leave a lot of room for the folks in Redmond, who will also see PC shipments drop by 4.3% Y/Y by December.

IDC forecasts that Windows 8 will appear on 7.4% of all tablets by 2017, up from 2.8% by the end of 2013. And Windows RT is expected to grow to 2.7% of the tablet OS market by 2017. Maybe there’s some good news in there if your glasses are rosy-colored, but Microsoft can’t be happy with the way things are trending with those miniscule numbers.

Perhaps Microsoft’s decision to drop International CES from its trade show schedule this year was a portent. Despite the hundreds of tablets and notebooks on display that were running Windows 8 and RT, they were hardly missed by attendees as there were plenty of other goodies to see in Las Vegas. It must be terrible to throw such a big party and see so many empty seats…

This article originally appeared on the Display Daily Web site.

Posted by Pete Putman, April 12, 2013 2:45 PM

About Pete Putman

Peter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.

Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.