Microsoft CEO Steve Ballmer says that he expected 500 million people to have Windows 8 by the end of 2013. But a look at Windows' sales history and PC growth shows that number is way off base.
Ballmer says that Windows 8 means the "rebirth" of Windows, according to Agence France-Presse. The agency also reports that "Ballmer estimated up to 500 million users will have Windows 8 next year."
(Update: Microsoft says that Steve Ballmer never said that there will be 500 million users of Windows 8 by 2013. For details, see my blog post, "Microsoft: Steve Ballmer never said Windows 8 would have 500 million users by 2013.")
Based on sales of Windows 7, and expected PC growth, that number appears to be wildly overinflated. Let's do the math.
In April, 2011, Microsoft announced that in the 18 months after Windows 7 was released, more than 350 million licenses of it were sold. That comes out to a little more than 19,444,444 sold per month.
Windows 8 will likely be released some time in October of this year, meaning that it will have less than 15 months to meet Ballmer's 500 million goal. Let's say that Windows 8 is released October 1, and Microsoft gets the full 15 months to reach 500 million. That comes out to 33,333,333 copies a month, an astronomical growth rate of 71.4 percent compared to Windows 7 sales, an impossible task.
Microsoft can't count on overall PC growth to skyrocket during 2012 and 2013, because Windows PC sales are expect to grow only modestly. Jay Chou, senior research analyst for IDC's Worldwide PC Tracker says:
"2012 and 2013 will bring significant challenges for Microsoft and the PC community. The Wintel platform must evolve to accommodate user expectations of ubiquitous computing on a multitude of devices and physical settings. Windows 8 and ultrabooks are a definitive step in the right direction to recapturing the relevance of the PC, but its promise of meshing a tablet experience in a PC body will likely entail a period of trial and error, thus the market will likely see modest growth in the near term."
Michael Dell says that businesses aren't likely to buy Windows 8 in large numbers, so Microsoft can't hope for a boost there. And ZDNet reports that BMO analyst Keith Bachman has said:
"Windows 8 will prove to be a disappointment, at least out of the gate."
In fact, even if every PC sold in the world in the 15 months after the release of Windows 8 had Windows 8 on it, Microsoft might not be able to meet the 500 million figure. Gartner expects total worldwide PC shipments to be 400 million or so in 2013. So how can 500 million copies of Windows 8 sell in the last three months of 2012 and all of 2013?
PC sales are being hurt by sales of tablets, notably the iPad, and that's not likely to change. Ballmer probably includes sales of Windows 8 tablets in his estimate. But Windows tablets have sold extremely poorly, and it's not very likely Windows 8 tablets will sell in large numbers and make much headway against the iPad.
Ballmer is likely including sales of Windows 8 smartphones sales in his number as well. But by all accounts, Windows Phone has so far been a bust. Gartner, for example, has found that Microsoft smartphones had a worldwide market share of 1.9% in the first quarter of 2012, and that includes older Microsoft smartphone operating systems, not just Windows Phone.
So where did Ballmer get that number? Possibly out of a hat. More likely, he thought it had a nice, round ring to it, and so chose it for that reason alone. There's a chance that the 500 million number includes the total number of people using Windows 8, not buying Windows 8. But Microsoft typically talks about total sales, and does not include the number of people who share an operating system.
Most people probably don't pay much attention to Ballmer's pronoucements because he's well known for his sales hyperbole. But a CEO's job isn't hyperbole, and he's doing Microsoft a disservice if his numbers prove to be as off as they appear they will be.