Analyst: Windows 8 PC orders weak
Computer sellers have scaled back their expectations of the sales pop they’ll get from Windows 8 this year, an analyst said Monday.
Brian White, of Topeka Capital Markets, said that his checks of Asian computer manufacturers—the relatively unknown firms that build desktop and notebook PCs to specifications issued by the likes of Hewlett-Packard and Dell—found that orders last month climbed by less than half the average of the last seven years.
“With all of the sales numbers out for our ODM Barometer, October sales rose by 2 percent month-over-month and below the average performance of up 5 percent over the past seven years,” White said in a note to clients earlier this month. “This is weaker than our preliminary estimate of up 5 percent month-over-month in October and speaks to the continued challenges in the PC market.”
White’s ODM Barometer—ODM for “original device manufacturer”—is a metric of sales by the Asian companies that assemble PCs for brand-name computer sellers. It does not show sales of those PCs to buyers, but hints at the orders those computer sellers have placed for inventory.
The ODM Barometer for October was also down in a year-over-year comparison, repeating a less substantial slide in September, White said.
“The sales cycle has decelerated further into negative territory, dropping to down 13% year-over-year in October from down 9 percent in September,” he wrote. “This weakness is unusual given that PCs with Windows 8 and new ultrabook products are ramping.”
PC sellers had hoped that the release of Windows 8 would kick-start sales, which first flattened, then fell in the face of still-unsettled economies and fierce competition from smartphones and tablets for customers’ dollars.
It seems that computer sellers expected more from Windows 8 earlier this year, but have since rethought, said White. “Sales [by ODMs] in October will clearly be helped by the ramp of Windows 8, [but they’re] much lower than the PC makers originally expected a few months ago.”
His conclusion: “The macro [economic] weakness is weighing in on PC demand and the plethora of new tablets is driving more conservatism on the part of the PC makers,” he said in an email reply to follow-up questions.
The result: “The Windows 8 ramp is much lower than expected a few months ago, partly related to these issues and others,” White said.
ODM sales—again, a harbinger of orders placed by computer sellers for future PC deliveries—this year were also weak when compared to the months leading up to Windows 7’s launch in 2009.
“During October 2009, sales rose a similar 2% month-over-month,” White added in his email. “However, the three prior months [then] were much stronger than July, August and September of this year.”
Previously, Computerworld has tracked usage patterns of Windows 8 in the months leading up to, and including, the Oct. 26 launch, and found that the new operating system is being run by less than a fifth as many people as ran Windows 7 in the same months before its debut.
Although many analysts and Microsoft watchers have cautioned that it is too early to conclude that Windows 8 sales—and by extension, those of Windows 8 PCs—are sluggish, others, including David Johnson of Forrester and Paul Thurrott, who writes the popular “Supersite for Windows” blog and is the co-author of Windows 8 Secrets, have claimed that that is exactly what is happening.
Thurrott, who last week cited unnamed sources within Microsoft, said that Windows 8 sales were below the company’s internal projections and had been called “disappointing” internally. According to Thurrott, Microsoft has put the blame at the feet of its OEMs (original computer manufacturers), the vendors that contract with ODMs to build their wares.