Microsoft: Windows 8 selling well despite PC slump

Microsoft CEO Steve Ballmer speaks on Oct. 25, 2012, during a press conference at Pier 57 in New York. / Timothy A. Clary/AFP/Getty Images

SAN FRANCISCO Microsoft (MSFT) says the latest version of its Windows operating system is off to a great start. Yet it remains unclear whether the revamped software will win over enough people to revive the slumping personal computer market.

21 Photos

The evolution of Microsoft Windows

The company said in a statement on Wednesday that about 40 million licenses to Windows 8 were sold in its first month on the market, according to figures that Microsoft released in conjunction with the company's annual shareholder meeting held near its Redmond, Wash., headquarters.

While that number may look impressive, it's difficult to know what it means without more insights into how many Windows 8 devices have been sold in stores, said technology industry analyst Patrick Moorhead of Moor Insights & Strategy. That's because PC manufacturers pay for most Windows 8 machines, leaving it unclear how many have been purchased by consumers, companies and government agencies.

Microsoft didn't provide further details beyond saying that Windows 8 is being embraced by a list of companies that include Johnson & Johnson (JNJ), British Telecom and Bank of America (BAC).

The initial reception to Windows 8 appears to be "good, but not great," Moorhead said. "Is this going to be enough to turn around the PC market? No."

Another analyst, Rick Sherlund of Nomura Securities, said he thinks it's going to take longer than he initially expected for Windows 8 to make a significant difference in a computing market that is moving away from desktop and laptop PCs and tilting toward smartphones and tablet computers.

Microsoft built Windows 8 to enable people to control their PCs by touching on the display screen, just like mobile devices. A similar operating system called Windows RT is running on a tablet called Surface that Microsoft created to compete against Apple's (AAPL) popular iPad and similar devices designed by Google (GOOG) and Amazon.com (AMZN).

Sherlund, though, said other manufacturers aren't introducing Windows 8 devices that highlight the software's touch-control features as quickly as he expected. What's more, Nomura Securities projects sales of traditional PCs in the fourth quarter to decline by 7 percent from the same time last year. Another research firm, HIS iSuppli, already has predicted that this year will mark the first time annual sales of PCs will have fallen from the previous year since 2001.

In a research note issued Wednesday, Sherlund underscored his more sedate outlook by lowering his financial forecast for Microsoft. The revision trimmed his previous revenue estimate for Microsoft's fiscal year ending in June by 3 percent, or $2.3 billion.

Microsoft's stock price gained 28 cents Wednesday to close at $27.36, leaving them slightly below where they stood before Windows 8's Oct. 26 release.

[buckn]

I put Windows 8 on my non-touch-screen laptop because I heard it was more stable than Win7. I've had a chance to run it through its paces and have found that it is, indeed a more stable OS. I used to get the dreaded blue screen of death at least once every other week, especially when I opened MS Office and Photoshop at the same time. I've not had the problem since my upgrade. BTW, my computer does boot a bit faster, too, but that's just a nice extra.

[sjc_1]

They are selling Windows 8 upgrades for $69.95, with 100 million PCs running Windows out there, I can imagine that they might sell more than a few licenses.