Microsoft fee cut unlikely to boost low sales: analyst

SURVIVAL STRATEGY::As the PC sector loses steam, Microsoft is struggling to raise sales of its Windows 8 system, but researchers are pessimistic it will rebound

By Lisa Wang  /  Staff reporter

Wed, Mar 13, 2013 - Page 13

Microsoft Corp’s plan to cut royalty rates paid by contract PC makers to use the latest Windows 8 operating system is unlikely to significantly boost lukewarm sales of computers running the system because they still lack hit applications and face strong competition from Google Inc’s Android operating system and others, market researcher Gartner Inc said yesterday.

Over the past year, Microsoft’s Windows 8 did not stimulate PC replacement demand as much as expected, Gartner analyst Tracy Tsai (蔡惠芬) told a media briefing.

To accelerate the development of computers running Windows 8 and Windows RT, Microsoft plans to offer discounts in licensing fees to contract PC makers, the Wall Street Journal reported recently.

“Price is not the only factor that caused disappointing sales of Windows 8 PCs ... Microsoft’s Windows 8 system is facing growing competition from Apple Inc’s iOS and Google’s Android,” Tsai said. “No applications are developed specifically for Windows 8 PCs and consumers do not know what is unique about Windows PCs.”

Amid enormous uncertainty and complexity in the mobile computing market, sales of Windows 8 PCs and Ultrabook computers fell disappointingly short over the past year because of changes in consumer behavior, Tsai said.

The situation is likely to deteriorate further over the next two to three years as consumers are increasingly able to access their personal data on multiple mobile computing devices via cloud computing technologies, she said, adding that PC vendors needed to devise a new strategy to survive.

International Data Corp (IDC), another market researcher, last week said global PC shipments shrank for the first time ever last year, falling 3.7 percent, adding that it expected shipments to drop 1.3 percent annually this year, marking the second straight year of decline.

Tsai said she maintained a conservative attitude about the growth of global PC shipments.

The three-year PC replacement cycle could disappear as consumers will make upgrading their smartphones and tablets their priority, instead of getting a new PC, she said.

“The PC market will still grow, but a very slow pace in the next few years,” Tsai said. “PCs will make up an ever-smaller share of the overall mobile computing market over the near future in the emerging markets.”