Microsoft stakes out ambitious goal of 1B Windows 10 devices

But will the number matter where it counts, in mobile?

Windows 10

Microsoft's chief operating system executive yesterday put a stake in the ground, saying that in three years, tops, Windows 10 would be running on a billion devices.

"Our goal is that within two to three years of Windows 10's release there will be one billion devices running Windows 10," Terry Myerson said during the keynote address opening Microsoft's Build developer conference.

Later in the keynote, Myerson kept returning to the goal as motivation for developers to create Windows apps, and how they could potentially monetize their work. "With Windows 10, there will be one billion devices ready to run your applications," Myerson said.

One billion. A big number. To make that goal, Windows 10 would have to appear on 57,000 devices each hour over the next two years, 38,000 over three.

Some analysts thought that the goal was doable, conservative even. Others, however, questioned the number, as well as whether it much mattered.

"It's not only a reasonable goal, but the way they phrased the statement, they gave themselves a fair amount of wiggle room," said IDC analyst Al Gillen of the two-to-three-year spread Myerson offered. "They were cautious about what they said, and conservative I think."

He attributed the cautiousness to an attempt not to oversell the possible success, which if not met would anger investors years ahead.

Gillen went on to do a back-of-the-envelope calculation that assumed 300 million PCs sold each year, with half of them to consumers, for a total of 300 million over two years, 450 million over three. "Even if no devices are upgraded to Windows 10, that's at least 300 million right there," Gillen said. Then he added a quarter of the 1.5 billion existing Windows PCs -- consumers accounting for half of the 1.5 billion, then half of the resulting 750 million as likely to upgrade -- for another 375 million.

Gillen's 825 million over three years would still shy of the 1 billion, but he was confident that Microsoft could collect the remaining from sales of mobile devices, like tablets and smartphones.

Michael Silver of Gartner concurred. "Assuming the vast majority of new personal computers will be running Windows 10, the [billion] makes perfect sense," Silver said.

Gartner's own device shipment projections supported Silver. Last month, the research firm published its latest long-term forecast, pegging Windows device shipment at 358 million in 2016 and 383 million in 2017. For this year, Gartner estimated 331 million Windows-powered PCs, tablets, 2-in-1s and smartphones.

Those forecasts total 850 million. Assuming a third of 2015's are Windows 10 -- accounting for a four-month stretch of sales later this year -- putting a billion within reach when the first eight months of 2018 are thrown into the mix.

Microsoft undoubtedly did similar calculations before it boasted about the one billion target.

But other experts questioned the goal, if not the number itself then the rationale behind it.

"Windows 10 is a huge step forward," said Jan Dawson, chief analyst with Jackdaw Research. "A very large proportion of the Windows base will be on Windows 10, and I don't doubt that it can make the goal. But the whole billion is fragmented across all these different devices, PCs, tablets, phones. Yet phones are where are all the developers want to be. That's where people are spending money and time, on smartphone apps."

Dawson's point was that while there may be a billion Windows 10 devices in two or three years, the vast bulk of them would be PCs, not mobile devices that developers are most interested in, where apps actually sell.

Microsoft's second strategic pillar for its developer pitch was its universal app model and the new tools, announced this week, that theoretically make it easier to port Android and iOS apps to Windows. But Dawson wasn't buying those arguments either.

"[One] problem is that porting apps often results in a lowest common denominator approach, in which the very people most likely to be attracted to a lower-cost porting method are those least likely to be willing to put the time and effort into making the experience really shine on each platform," Dawson wrote in an expansive piece on his blog.

So is the one billion goal really reachable?

Microsoft has touted numbers like this before, notably in 2012 when then-CEO Steve Ballmer seemed to say that the impending Windows 8 would be on 500 million devices within its first year. Although Microsoft later asserted that Ballmer was misquoted, he and the company continued to argue that upgrades to Windows 8 would create a lucrative audience for app developers.

In September 2012, Ballmer stepped in front of developers to make the Windows 8 case. "There will be customers coming and looking for apps. That I can assure you," Ballmer said at the pep rally-like event. "It's going to create a heck of a lot of opportunity for folks in this room to make millions."

Everyone knows how that turned out.

With enterprise adoption of Windows 10 expected to be lukewarm for the first few years after its release, Microsoft's goal will rely on consumer PCs, both bought new and upgraded, and improved sales of mobile devices.

There's some precedent that can be used to gauge the upgrade tempo for Windows 10, which Gillen of IDC predicted would make up more than a third of his quick forecast. Computerworld has used the upgrade rate of Windows 8.1 -- like Windows 10, also handed to customers for free -- to estimate that up to 358 million existing PCs could be running Windows 10 with a year of the new OS's launch.

But while that signaled Microsoft would make its goal, Dawson remains skeptical it would matter. "I think the ship may have sailed," Dawson said in an interview. "It was possible to break into mobile market seven years ago, but it isn't 2008 any more. This will be very difficult. Although Microsoft may be choosing the best possible strategies, I'm not convinced they will actually solve the problem."

Not that Microsoft really had an alternative.

"Oh, they have to make it to one billion," said Carolina Milanesi, chief of research and head of U.S. business for Kantar WorldPanel Comtech. "Is there a choice?"

Copyright © 2015 IDG Communications, Inc.

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