What does Microsoft's Windows sales announcement tell us about PC sales?

PC sales are going well - but how do they compare with previous years? Photograph: Arcaid / Rex Features

Microsoft says that it has sold 400m Windows 7 licences. As I noted back at the end of April when Microsoft said it had shipped 350m licences, the takeup has gone better, proportional to the total number of PCs sold each year, than it did with Windows XP in 2001 (and definitely better than with Vista in 2007).

But what do those two numbers – the 350m and the 400m – taken together with their dates of announcement tell us about PC sales in the second quarter?

Actually, they suggest that they aren't going that swimmingly. Here's why.

In the second quarter of 2010, the research companies Gartner and IDC say that about 80m Windows PCs were sold (I've subtracted the number of Apple Macs sold for the quarter). In the second quarter of 2009, the figure was 66m. (So that was a rather impressive year-on-year growth of about 20% from 2009 to 2010.)

So: 350m sold by 22 April (the blogpost actually says "more than", but let's round it down, because that puts a better light on PC sales for this quarter.)

Two months (and a week) later, Microsoft is saying that it has sold an additional 50m licences. Assuming that sales have been going at a steady rate through the quarter, that implies sales of just 75m PCs in the second quarter - which would be a 6% dip. That's quite substantial, and if correct, would come after a 2% dip in Windows PC sales in the first quarter. Possible reasons could include financial squeezes on businesses and the Japan earthquake slowing business in the Far East.

One factor that objectors might raise: my calculation in April showed that Windows 7 licences were 67% of PC shipments in the first 18 months. (That's because you get an overlap with older systems, including XP and Vista.) If that's still the case, then that 75m would actually be 125m. But as there's never been the slightest sign of the PC market ever hitting that size, we can discount that as wrong. The 67% figure for the first 18 months will have arisen because of that OS release overlap; but now you can't get XP - Microsoft stopped selling it on October 22 - so it's Windows 7 all the way now.

Allow perhaps for some small mix of Vista licensing and/or "white boxes" being shipped without licences, and you're still looking at zero or very small growth in PC sales over 2010 - perhaps a total of 80m. Financial snalysts such as Richard Windsor at Nomura forecasting a total growth of only 3% in PC sales this year.

Yes, but what does it mean? It means less money for Microsoft. If there were only 75m Windows PCs sold in the second quarter, that translates directly to its bottom line.

Going by Microsoft's own financial results (whose fourth-quarter figures are coming up next week), the three-year average for revenue per Windows PC sold is $56.47, and profit is $39.91.

Plug those in to two scenarios and the following emerges for the Windows division:
• 75m PCs sold: revenue: $4.23bn; profit $2.99bn
• 80m PCs sold: revenue: $4.52bn; profit: $3.2bn.

Those are still big numbers - but they're not showing the growth that Steve Ballmer might have hoped for. (The 75m is pretty pessimistic; the 80m would be level-pegging with the first quarter, but if netbook sales have collapsed further then it might be too large.) Those Windows 8 tablets really can't come soon enough.

Update: There is another confounding factor which might mean that the number of PCs sold is actually higher than 80m, but that Windows licences aren't following them: PC sales in China. The Wall Street Journal in May reported a speech in which Ballmer noted that Microsoft only gets about 5% of the revenue from China that it gets from the West, because of rampant piracy. For 2011, the WSJ noted, IDC "projects PC unit shipments in China are likely to increase 12% to 71 million units, just shy of the 75 million units in the U.S., where it expects sales to be flat."

If those shipments aren't matched by Windows licences, then we could see an increase in PC sales even while Microsoft's revenue from them doesn't grow. It's a possibility: we'll find out next week.

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Post-PC? What Apple iPad you tell us about computing future sales and PC trends

PC sales without Apple 2007q3-2011q2, around the world. Source: Gartner
Some interesting points, the third as a result of Apple's quarter (fiscal year starts in September) results, and the lion version and the version of the new computer of the other day and broader developments in the computer sales:
• iPads (9.2 m) exceeded Macs (3.95 m) in the fourth quarter in a row - and they are now more than double sold.
• If you iPads "Piece described" as (Steve Ballmer does, but you can not agree) then Apple would be the second largest PC maker in the world (according to HP, which in the second quarter according to Gartner 14.9 m units shipped.)
Probably not useful one IOS as "PC" define it however. The whole Tablet class is intended for a different kind of data processing; the HP TouchPad safely positioned itself as a business device (something that by its leaders me time and again stressed), but the kind of work do you do with him fits in places where laptops and desktops just not go.
The new Mac mini released • no optical drive (CD or DVD) on Wednesday.
• The new MacBook Airs have released on Wednesday no optical drive.
• The low-end MacBook is gradually abolished.
The new MacBook Airs • use only Flash (SSD) drives. They are smaller, but they are much faster than hard drives.
• Lion will be available as a download for $29 in the United States (£ 21 in the UK) or can it on a USB key for $69.
• Lion is much more like a Tablet operating system than previous versions of OS X. Not surprisingly, since Snow Leopard came out before the iPad OS had been completed.
• Lion has a "Internet recovery" where if the hard disk of your computer needs repair, you can start from the Internet. You need high speed, but it is available in many places. This will not help if your hard drive crashes, but it is certainly helpful.
• If you Apple's Macintosh auctions of the worldwide PC market, a total of 81.2 m (Gartner), or 80.4 (IDC)-strip Windows PCs were sold in the quarter. I assume that close to accurate as if it compares you with my analysis of Microsoft's "more than 400 m Windows 7 licenses" sold where I 80 m PCs than the figure offered (because obviously Microsoft has received a license to Macintosh programmes).
• Who is a year growth of Windows PCs by only 1.8%; and that growth is only visible as a clip of 9% of PC sales in the Asia Pacific region grew to. The picture in the United States and Western is the contraction in Windows PC sales. (I am qualified to add as Apple, grew again faster than the rest of the market - 11.9% or almost ten times faster - for 16 consecutive quarters.) (It comes from a very low base, but it is still an interesting fact, which must point to a "halo effect" from the success of the iPhone and iPad recently.)
• Microsoft is looking for tablets and other devices to: his ambitious "an ecosystem" plan seems in a world where you can not, your desktop PC... or you may be aligned. You may be on a tablet. For Microsoft, it is the only way forward.
Since all... you'll see a few things. PC sales in the West, where they first invaded really look how they have passed their peak. Companies replace older systems have been driving sales together, but consumers hold back. Sometimes this will be due to the Economic Outlook: faced people in the paddling is no reason at the moment when the prognosis is exactly rosy with the United States United States and Europe with its debt ceiling and the euro area a meltdown.
But the risk that at the time these two crises have sorted itself out and in the United States and Europe back to "normal" growth (what that sees in the future), will have turned to computing trends. Apple tends to be the computer industry to places to which already it could go, but is enough not quite brave to in to move: give up floppy drives with the iMac, and Wi-Fi in laptops. (True, Dell was the first time with Wi-Fi in laptops, but not push it it out more than half of its laptop line, as Apple did with the original iBook.)
Now Apple are saying is that the future is no optical drive, no hard (Flash instead) Internet and boots. Many of the computing future might look not like the computing past. Are the right way for children to interact with computers learn elementary schools first desktop PC really? Does everyone in a company need a desktop or laptop?
Yes, one could certainly argue that tablets are just a passing fad like Netbooks. (And look where going Netbooks: sales are way down.) But Microsoft doesn't seem to think that; It seems to think tablets (as a slate or "Convertible" tablet with keyboards) are an important segment.
Apple, meanwhile, thinks that all connections in the cloud. Google agreement with its GoToMyPC, which is completely cloud-based (albeit with some offline work promised.) Which provides on also a note if you're going to see that Blu-ray drives in Apple Macs. Yes, they are all over the place in Windows laptops. But it looks that they will never come to Apple machines. Apple is instead in the direction of downloads show way she sees things in the future.
And if you think that's just Apple, consider this question: faith guides you, that we are all at some point end 2012 expect these Windows 8 tablets, bulky DVD or Blu-ray drives will contain? And do you think that it the spinning hard drives or SSDs? The answer is pretty obvious.
Microsoft reports results on Thursday night. See what he says about PC sales. (The transcript is time on seeking Alpha the next morning UK.)
Go - predictions, what the data will look like in five years. Five years ago there was no iPads, no Netbooks, hardly SSDs, and you get even floppy drives, but it was a Blu-ray drive is difficult to achieve. How about 2016? What does, that you look like?

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What does Microsoft Windows distribution announcement you inform us about PC sales?

PC sales are good - but how they compared to previous years? Photo: Arcaid / Rex features

Microsoft says that it has sold 400 m Windows 7 licenses. As mentioned back at the end of April when Microsoft said it had delivered 350 m licenses, the storage better gone, proportional to the total number of PCs sold each year, as it is with Windows XP in 2001 (and in any case better than with Vista in 2007).

-But do the two numbers 350 m and 400 m - be together with their announcement tell us about the PC sales in the second quarter?

Actually, they suggest that they are not, go the swimmingly. Here is the reason.
In the second quarter of 2010, the research company Gartner and IDC say that about 80 m were sold Windows PCs (I've deducted sold for the quarter the number of Apple Macs). In the second quarter of 2009 was the figure of 66 m. (Sun, that was a pretty impressive previous year growth of about 20% between 2009 and 2010.)
So: 350 m from 22 April sold (the blog post actually says "greater than", but let down, round us, because that puts a better light on PC sales for this quarter.)

Two months (and a week) later Microsoft says that it has sold an additional 50 m licenses. Assuming that sales through the district are to go, implies, sales of only 75 m PCs in the second quarter - which would be one 6% dip. This is quite significant and if properly, according to a 2% of bath in the Windows-PC sales in the first quarter would come. Possible causes can financial squeezes on companies and the earthquake in Japan slows business in the far East included.

One of the factors that could cause of conscience: my calculation in April showed that 7 licenses Windows 67% of PC shipments in the first 18 months. (This is because you get an overlap with older systems, including XP and Vista.) If this is still the case, then, would be that 75 m 125 m. But as there has never ever been the slightest hint of the PC market meeting this size, we can as the wrong discount. The figure of 67% for the first 18 months will release due to its OS overlap occurred. but now you not XP - Microsoft stopped on October 22 - sales, making it now the way Windows 7.
Allow maybe some small mix of Vista licensing and/or "white boxes" without licenses delivered will and Windsor at Nomura are still looking to 0 (zero) or very small growth 2010 - perhaps a total 80 m. financial Snalysts such as Richard PC forecast total growth rate of only 3% in PC sales this year.

Yes, but what does it mean? It means less money for Microsoft. There were only 75 m in the second quarter Windows PC directly on the bottom line sold, translated.
Going to Microsoft's own financial results (numbers come from the fourth quarter until next week), three-year average sales per Windows PC sold is $56.47, and profit is $39.91.

Close the two scenarios and the following result for the Windows Division:
• 75 m PCs sold: revenues: $4. 23bn; Enjoy $2-. 99bn
• 80 m PCs sold: revenues: $4. 52bn; Profit: $3 billion.
Are still large numbers - but they are not showing the growth of the Steve Ballmer could have hoped for. (75 M is pretty pessimistic, level access to the first quarter, but if more sales have reduced NetBook would be 80 m then may be too large.) This Windows 8 tablets are not really early enough can.

Update: It is actually higher than 80 m is what could mean that the number of PCs sold an another confusing factor, but the Windows licenses are not for them: PC sales in China. The Wall Street Journal in May reported a speech in the Ballmer said that Microsoft just about gets 5% of the revenue from China, which receives from the West, due to the rampant piracy. For 2011, Wall Street Journal IDC announced "projects PC unit shipments in China are 12% to 71 million units, just shy of 75 million units in the United States where it expected sales that flat increase."

If these programmes accesses Windows licenses are not, could we see doesn't grow sales PC even during Microsoft's revenue from them. It's a way: we find out next week.

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