Despite Microsoft's well-publicized tablet woes, Windows 8 devices are starting to show serious sales growth. Windows RT sales, meanwhile, are about as bad as it gets. So says the most recent IDC report. At this rate, how long will Microsoft prop up RT?
The most recent figures from IDC say that 1.8 million Windows 8 tablets were sold in the second quarter of 2013, for a 4% market share. That's compared to a 1% market share the year previous, and a year-over-year growth rate of 527%.
Windows RT, meanwhile, has tanked. IDC says that only 200,000 sold in the quarter, for a dismal 0.5% market share.
Windows RT poor sales should surprise no one. Microsoft recently had to write off $900 million because of unsold Surface RT inventory and cut prices on RT tablets by $150.
But Windows 8 tablet strength should surprise most people. The Windows 8-based Surface hasn't been a big seller, and as a result, Microsoft recently announced a $100 price cut for it. If Microsoft isn't selling Windows 8 tablets in bulk, who is? IDC analyst Ryan Reith says it's OEMs including Asus, Hewlett-Packard, Lenovo and others. He told Computerworld:
"HP had a good quarter with [Windows] tablets. Dell shipped around 120,000, which is growth for them, although it's such a small number compared to their traditional PC business."
He said that Microsoft's portion of Windows 8 tablet sales, "was relatively small" and added, "There's still more of a push for Windows 8 than a demand."
What's going on here? Why are OEMs making headway with Windows tablets, while Microsoft itself can't seem to sell them? It's all about price and choice. OEMs have long known that they're in a cut-throat business, and can't rely on their names alone to sell tablets. So they shave every dollar they can off their prices, and carefully watch the market in order to respond to changing consumer demands for new features and designs.
Not so Microsoft. Until the most recent round of desperate price cuts, it's been tryint to sell high-priced tablets into a market that doesn't want them. It's not at all clear whether Microsoft will become as consumer-focused as its OEM partners.
As for Windows RT, consider it dead. There's no reason for the platform to exist. Lower-power Intel Haswell chips allow manufacturers to sell power-sipping, full-blown Windows 8 tablets. Almost all of Microsoft's partners have either said they won't make RT tablets, or are now backing away from them. Microsoft will continue to sell the RT-based Surface, if only to save face. But it has no future as a long-term platform.
Increasing Windows 8 tablet sales is certainly good news for Microsoft. But bad news is that most of those sales are going to OEMs such as HP, not to Microsoft. That doesn't bode well for Steve Ballmer's plan for turning Microsoft into a devices-and-services company. If it can't sell devices, what will its future be?