Microsoft preps Windows 8 upgrade deal for early June debut, says report

Even with the offer, summer sales expected to remain 'lousy,' says analyst

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"It is impossible to know if consumers would have stopped buying if there was no offer, but the sales trajectory for consumer sales before the last couple of upgrades -- and especially the last one for Windows 7 -- show that sales continued on pace as we got closer to the switchover," said Baker. "Back-to-school is a very inelastic purchase period. ...If someone needs a new PC for the start of the school year, they really do have to buy one in August."

With an expected final release of Windows 8 in October -- the same month that Windows 7 debuted in 2009 -- Microsoft and OEMs are in the same bind as three years ago for the back-to-school season.

Baker's convinced that upgrade programs like Microsoft's work, but cautioned that sales will probably be weak this summer, even during back-to-school promotions. "Sales have been lousy all year and we anticipate that to continue until the release of Windows 8," Baker said.

While Windows 8 is a major overhaul of Microsoft's veteran operating system -- the OS promotes touch for input and features a new app environment, dubbed "Metro," where simpler, touch-enabled apps run. But Windows 8's touch-first attitude may be lost on people who buy a Windows 7 machine, most of which lack touch support, this summer.

"Touch is meaningless to the upgrade market we are talking to here," argued Baker. "How many consumers have any idea that Windows 8 is touch focused, or even what it looks like? Very few."

Instead, Baker said, consumers seeing the upgrade offer will assume Windows 8 is an improvement on Windows 7, which more than half are familiar with.

A major unknown in this year's upgrade program is how Microsoft or the OEMs will deliver the discounted Windows 8.

"Will Microsoft use the Windows Store or a direct download, or will we see a lot of discs being mailed out?" Baker wondered.

The last two upgrade programs relied on physical media that was shipped to customers, but as Baker hinted, Microsoft has other options, including the Windows Store -- if it opens that e-market to Windows 7, which it has not done -- or downloads from its website linked to redemption or activation codes it distributes to eligible PC owners.

Microsoft has the ability to offer that last option: Microsoft sells upgrades of Office 2010 minus installation media by providing activation keys that unlock downloaded versions of the suite.

For users who have already purchased Windows 7 PCs and want to upgrade, Microsoft has said it will reveal "limited-time programs and promotions" for Windows 8 at some point, hinting that it may repeat the aggressive pre-sale discounts it offered for Windows 7 before that edition's ship date.

Apple, which is also releasing a new operating system upgrade this year, has not announced an upgrade program, but is expected to: Last year it offered buyers a free copy of OS X 10.7, or Lion, if they bought a Mac in the second half of 2011.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Copyright © 2012 IDG Communications, Inc.

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