Netbook Sales Lift Windows XP Home Share
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News Analysis. Windows XP had nearly disappeared from U.S. retail PCs in August. By December, Windows XP PCs were second to Vista Home Premium. Netbooks are the reason. |
In December, XP PCs accounted for 11.2 percent of Windows computers sold through retail (online and brick-and-mortar operations), according to NPD. For notebooks: 13.7 percent.
NPD provided data for Windows operating systems shipped on PCs, which is what I requested—not retail boxes. NPD tracks sell-through, not ship-to. Microsoft tracks Windows licenses shipped into the channel. NPD's numbers track Windows PCs sold to customers. Sell-through more accurately reveals market trends.
"The XP number is almost all netbooks," Stephen Baker, NPD's vice president of industry analysis, told me earlier today. "Before August, XP was zero."
Whoa, that's a dramatic change and further evidence that Microsoft was right to mainly blame netbooks—or mininotebooks, as some analysts call them—as a major reason for recent Windows revenue declines. During the fourth calendar quarter, which is Microsoft's fiscal second, Windows Client revenue fell 8 percent year over year; operating income declined by 13 percent.
Mininotebooks' increasing popularity has led to a retail resurgence in Windows XP Home PC sales. Microsoft makes much less per XP Home copy than it does for Windows Vista "premium" versions. Ten months ago, Microsoft granted a Windows XP Home licensing extension, through 2010, specifically for mininotebooks. Most early mininotebooks couldn't adequately run any Windows Vista edition.
In the fourth quarter of 2007, the mininotebook market essentially was non-existent. In the quarter a year later, manufacturers shipped 5 million mininotebooks—or about the same amount as for the rest of 2008, according to IDC. Mininotebook sales started slow but accelerated as features changed.
"As the year went on and on, the products tended to move into the mainstream market; the feature set changed dramatically, from enthusiast to consumer features," Stephen said. Manufacturers replaced smaller solid-state drives with larger-capacity hard disk drives, screen sizes expanded from 7 inches to 10 inches, and Windows XP Home pushed aside Linux. Because of the changes, "they're in stores finally," Stephen said of mininotebooks.
The XP surge is a mixed blessing to Microsoft, in some ways less than more. What Microsoft should want is Vista on netbooks. But development decisions Microsoft made years ago proved to be misguided. During the October 2003 Microsoft developer conference, Chairman Bill Gates laid out Microsoft's vision for the PC in 2006. The design goal, which Microsoft used for Windows Vista development, called for 4GHz processors and 3X increase in graphics performance. Instead, PC performance decreased, as notebook sales surged against desktop PCs. Early mininotebooks turned out to be way underpowered for Windows Vista.
But as mininotebooks go mainstream and bulk up, more of them are capable of running Vista—and even more Windows 7, because of changes Microsoft made to the operating system. Integrated graphics are improving, too. Over the weekend, I stopped into my local SonyStyle store to gawk at Vaio P series mininotebooks. The overall Windows Experience Index rating was an oh-so-low 2.0 because of the 1.3GHz Intel processor. But one component ranked highest: 5.9. Get this, it was an Intel GMA 500 graphics chip set, with no memory. The chip set uses system memory and yet rated 5.9. That's certainly good enough for Vista Home Premium, which was installed on the Sony computer.
Stephen must love the Vaio P for the pricing, starting at $900. When we talked today, he fretted about mininotebook features improving, but selling prices staying the same or declining. Stephen warned: "$399 netbooks aren't going to be a net-net for anyone." They will cannibalize sales of larger notebooks, whose average selling prices would decline in response. Stephen would be happier with mininotebooks "selling for $449 or, better, $499."
On Tuesday, Microsoft announced six Windows 7 versions and not one specifically for mininotebooks, as some analysts and bloggers had speculated. Microsoft did announce plans to expand Starter Edition availability—worldwide, which means the United States, too. OEMs install Starter Edition on computers. Why not mininotebooks, to cut licensing fees?
"I don't think you're going to see it on netbooks," Stephen countered. There is no need for an underpowered Windows Starter Edition. "If you look at netbooks, they're getting smarter, not dumber."
[Please send your tips or rumors to watchtips at live.com].
Related Posts:
- NPD: One Windows 7 Isn't Enough, Microsoft Watch, Feb. 5, 2009
- Six Sevens Is Five Too Many, Microsoft Watch, Feb. 3, 2009
- Next Windows 7 Milestone: Release Candidate, Microsoft Watch, Jan. 30, 2009
- Windows 7: Model for Microsoft Reinvention, Microsoft Watch, Jan 28, 2009
- Can Microsoft Blame Netbooks?, Microsoft Watch, Jan. 26, 2009
- Six Sevens Is a Bad Idea, Microsoft Watch, Jan. 26, 2009
- Don't Try This with Windows XP, Microsoft Watch, Jan. 26, 2009
- Why Work When Windows 7 Is All Play?, Microsoft Watch, Jan. 13, 2009
- Did You Get Windows 7?, Microsoft Watch, Jan. 11, 2009
- Are Telco Subsidies Coming Back?, Microsoft Watch, Dec. 9, 2008
- Does Windows Have a Future on Netbooks?, Microsoft Watch, Dec. 7, 2008
- Origami: Flattened by Netbooks?, Microsoft Watch, Sept. 29, 2008
- XP Pro Execution Set, Home Gets Reprieve, Microsoft Watch, April 3, 2008
- Microsoft's Big Problem in a Small Box, Microsoft Watch, Dec. 7, 2007
Comments (25)
It is a smart move M.S. is making with Windows 7. Perhaps this will be the O.S. that will finally put XP out to pasture. Or out to stud! XP is great and I love it, but things have advanced, and the Windows 7 platform will serve the needs of the P.C. user in an advanced way that XP can no longer.
Posted by Ridley | February 5, 2009 4:45 PM
It is a smart move M.S. is making with Windows 7. Perhaps this will be the O.S. that will finally put XP out to pasture. Or out to stud! XP is great and I love it, but things have advanced, and the Windows 7 platform will serve the needs of the P.C. user in an advanced way that XP can no longer.
Posted by Ridley | February 5, 2009 4:46 PM
Netbooks for $900? Maybe a very small percentage but the category was created because of demand for low price portables. Unless you're very concerned about battery life you're not going into this category looking for anything other than savings.
I don't see where there is much room for Microsoft to increase the Windows 7 netbook license fee for OEMs to anything much greater than the XP fee. If they want a share of this market they're going to suffer losses to their bottom line.
Posted by Phil | February 5, 2009 5:19 PM
@Phil
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I agree, buts lets say for a minute that MS take a loss on Windows 7 and lets also say that its a great Netbook platform, by the time its released (apparently end 2009 early 2010) how many netbooks will already have been sold? who will be considering a replacement to something they have not had a long time?
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Since one of the functions of a netbook is simple functionality, are people really going to want to buy another, especially since XP is pretty solid on the Netbook platform.
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I dont believe peoples expectations of Netbook require being up-to-date with the latest release of an OS, as long as the machine gives them portable functionality, then its serving the purpose it was bought for.
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Unless its going to be suggested that all those who bought XP are in someway "missing out" on a major functionality issue that Windows 7 netbook offers, I just cant see this being a big seller, even if the platform is a great as some believe.
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It may even work in the favor of the consumer as vendors try to quickly shift the XP netbooks in favor of the Win 7 ones. Maybe for Linux/XP netbooks, 2009 will be a buyers market?
Posted by Goblin | February 5, 2009 5:39 PM
Netbook sales are catching fire. XP has been the O.S. of choice, but not for long, as Windows 7 is being readied to take its place on the Netbook. M.S. will likely keep their commanding market share on Netbooks as Windows 7 will bring these tiny P.C.'s into the next decade.
Excellent article...
By Susan Choney, MSNBC News: "Netbooks, the little laptops geared to mainly Web surfing and e-mail, have tiny keyboards, small screens — and the Windows XP operating system on many of them now.
That may be one of the saving graces and selling points of the laptops, which are making a dent in the PC world. A year or so ago, when netbooks first came on the market, most featured the Linux operating system. For many potential buyers, other than technophiles, that was a deal-killer, said Stephen Baker, NPD Group’s vice president of industry analysis.
“Customers don’t want Linux on those machines. Retailers don’t want Linux on those machines,” he said. “The fact that there’s a Windows platform available has been a big reason that we’ve seen a lot of the retailers start to pick these products up and try to get them into mass distribution.”...And Windows 7 is envisioned as being netbook-friendly, so much so that Microsoft senior vice president Steve Sinofsky praised the new operating system’s efficiencies as he waved a netbook in front of the audience at the Professional Developers Conference last fall.
“I am currently using this netbook, with a 1 GHz processor and 1 GB of RAM, and it’s running Windows 7, and when I boot it, about half that RAM is still available.
“I’m pretty excited about this class of machine…and the work we can do to deliver Windows 7” on it, he said."
Posted by Ridley | February 5, 2009 6:11 PM
and to balance Ridleys post out and show that you should never just read one opinion:
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http://www.vnunet.com/vnunet/news/2233381/netbooks-sales-driving-linux
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Quote from article "The burgeoning netbook market is helping to drive Linux adoption around the world, according to new figures from Forrester Research."
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Whose opinion to take? Doesnt matter, its what is best for YOU the end user.
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Since the future of Linux doesnt rest on market penetration (afterall its been thriving long before the recent increase in takeup on the desktop) the whole issue is accademic.
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I think the lesson learned here is its not hard to find links supporting any point of view. The purpose for posting them is not to state fact but merely encourage debate and further research by the end user.
Posted by Goblin | February 5, 2009 6:30 PM
The overwhelming majority of netbook users want Windows on their tiny P.C.'s. I can't blame them. I was looking at a netbook in a retail store the other day, and it had XP on it. Very intriguing little P.C. I however, will wait for Windows 7 on the netbook. Can you imagine the advances and the integration M.S. will work on with Intel? These next-gen netbooks should be out early next year, and they should be awesome.
Small quote from the article in my previous post... "“Customers don’t want Linux on those machines. Retailers don’t want Linux on those machines,” he said. “The fact that there’s a Windows platform available has been a big reason that we’ve seen a lot of the retailers start to pick these products up and try to get them into mass distribution.”
Posted by Ridley | February 5, 2009 6:38 PM
Im glad youve mentioned Intel.
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It appears Intel didnt love the "feature rich Vista"
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http://www.informationweek.com/news/windows/operatingsystems/showArticle.jhtml?articleID=208801142
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Now the question is, will they find any compelling reason to go to 7?
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"I however, will wait for Windows 7 on the netbook. Can you imagine the advances and the integration M.S. will work on with Intel? These next-gen netbooks should be out early next year, and they should be awesome."
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and if you wait another 100 years, the technology will be even more "awesome", and you never know, the malware issue of Windows may finally be sorted.
Posted by Goblin | February 5, 2009 6:44 PM
Ridley,
If you going take the place of Andre da Costa, and quote articles, at least have the common sense, to provide the link. It might even be legal that way as well. Not everyone, or even most, are going trust someone who posts in the same exact style of copy and paste from a M$ Press Release type web pages. Its only fair to link the the article, otherwise, you are stealing their work.
Posted by Chips B Malroy | February 5, 2009 6:50 PM
Ridley :wrote
"The overwhelming majority of netbook users want Windows on their tiny P.C.'s."
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I am in the minority. I am proud to be in that 0.86 % or 4% or whatever it is now. I have the EEE PC with the 4 GB SSD . I had Xandros on it, I wanted better and installed Easy Peasy (Ubuntu 8.10 for EEE PC's).
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I am very happy with it, works great and can do wireless, watch videos and listen to MP3s. The battery life is about three hours.
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But who cares anyway if forever I am in the minority. I just like the feeling that I don't need Windows to get things done with this netbook. As much I wished that Linux had the entire Netbook market to themselves....its good to see XP have a second life.
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In fact I have several other computers that are all Linux and have some OSX Tiger and Panther machines. OSX is a pretty good OS, I think Apple is making a mistake not making OSX available for all computers....but that is for another subject.
Posted by Ralph | February 5, 2009 6:57 PM
So if Microsoft isn’t going to put Starter Edition on netbooks, do you think it’s instead going to offer full Home Premium, at the regular Home Premium price, and increase the price disparity with the Linux configurations even more?
Posted by Lawrence D'Oliveiro | February 5, 2009 7:01 PM
Lawrence D'Oliveiro :
"So if Microsoft isn’t going to put Starter Edition on netbooks"
The question to ask is, if M$ is not going to put the Starter Edition on Netbooks, then where? Since its going to be put only on certain hardware by OEM's, it does mean Netbooks. Can't see anyone buying Starter as long as XP Home is around, or Linux. Another point is that M$ needs something cheap to replace XP Home,if M$ is serious about killing XP Home in June 2010.
Posted by Chips B Malroy | February 5, 2009 7:27 PM
Microsoft preparing to retire Windows XP
tgdaily.com/content/view/41315/140/
Redmond (WA) - Microsoft will soon move its Windows XP operating system away from its current mode of "mainstream support" into an era of "extended support." The change will initiate on April 14, and is designed to give Windows XP a fixed five years of life before closure. After 2013, Microsoft will cease all public support for the long-staple many consumers and businesses had relied on for the bulk of this decade.
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MS:Do you want XP? Go to hell..
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HP releases netbook interface for Ubuntu
http://www.downloadsquad.com/2009/02/04/hp-releases-netbook-interface-for-ubuntu/
Hewlett Packard has released a custom version of Ubuntu Linux designed for netbooks. For the HP Mini 1000 Mi Edition, to be exact. Under the hood, the operating system is based on Ubuntu 8.04 Hardy Heron. That means it can run pretty much any application that runs on Ubuntu including OpenOffice.org, Firefox, Thunderbird, Sunbird and Pidgin. In fact, it comes preloaded with all of those applications plus a few more. It's also fairly easy to install other Linux staples like image editor GIMP.
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Good News.
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Posted by Marco | February 5, 2009 7:28 PM
Starter is cheap. That is its only saving grace. XP Starter sold for $3 overseas, but nobody bought the crippleware. Because it only cost a buck to buy XP Pro overseas, but not legally.
The Seven Starter Edition is a stop gap measure to try to stop Linux, its a giveaway OS in case the price of Netbooks drop to the point that Microsoft cannot charge real money to put an OS on the cheapest Netbooks. This is starting to look like a real possibility. As computers start to cost less, as the world wide recession drives down the cost of hardware, M$ will have a harder and harder time hidding the true cost of what OEM's pay for Windows. You cannot charge $100 for Seven Home Premium on a $200 Netbook, for a total price of $300. Especially when you can get that $200 Netbook with Linux on it for $200. That is when Netbooks come down to $200. Which maybe soon.
Cheap computers is what Micro$oft fears most. If people try Linux, MS will lose many of them. That is what $3 Seven Starter Edition is for. Microsoft fears Linux, and in no way, wants users to be able to buy computers with Linux on it, even if it has to virtually give Windows away for near free.
Posted by Chips B Malroy | February 5, 2009 7:42 PM
Open letter failed; Microsoft screws over students again
http://blogs.zdnet.com/igeneration/?p=939
Quote:
I can’t say I’m not surprise; Microsoft has a habit of annoying me and screwing over students. We may as well have a quick look as to what is in the “student” edition of Windows 7 - which you’ll see isn’t as easy as you might think.
Encryption is important, and so is location aware printing (for finding printers near your physical location); both of these are available in the Professional edition, but not the Home Premium. Forget AppLocker (locks down applications to other users), DirectAccess and BranchCache (both in conjunction with the sister-server operating system), but look at the others.
Multiple languages are essential for international students, and so is having BitLocker and BitLocker To Go. Why aren’t these part of these editions? Security is absolutely essential for laptops, especially when those money-grabbing snot-nosed Cambridge (meh) students come-a-knocking.
Microsoft is once again making a massive mistake. Do they even consider students anymore, or am I just wasting my time?
Posted by Marco | February 5, 2009 7:44 PM
It will be an awesome experience being able to use the new advanced Windows with a netbook. This will enhance Windows sales and netbooks sales together. Windows 7 will be the perfect compliment to this fast growing segment.
Posted by Ridley | February 5, 2009 7:55 PM
Linuxtracker - Moving 180 Terabytes of Linux a Year
Quoting:
Among the early adopters of the BitTorrent protocol were several Linux projects, saving thousands of dollars in bandwidth costs. In 2005, Linuxtracker started to aggregate these Linux distributions, and it has been growing steadily over the years, racking up more than 130,000 unique visitors each month.
The site’s server currently tracks more than 40,000 peers and in the past 12 months it coordinated the distribution of 180 terabytes worth of Linux software
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http://linuxtracker.org/index.phpHappy Anniversary!!
Quoting:
"In case you've missed the hoopla leading up to today, Linuxtracker.org is celebrating 4 years of tracking tux. We uploaded a Slax 4.2.0 Torrent and began our journey to become the premier Linux
Bittorrent Repository online. I think we've succeeded!
Now we serve over 133,000 unique visitors a month, we hit almost every country in the world and we have over 1,000 current Linux Torrents and 6,000 members. We couldn't have done it with out our members and visitors and that's why, beginning today, we're going to be giving away some amazing stuff over the next 25 days!!"
Posted by Marco | February 5, 2009 8:12 PM
Link;http://linuxtracker.org/
Posted by Marco | February 5, 2009 8:17 PM
@Marco:
Hey old friend, enjoyed your link on the HP Linux version. I hope HP will extend that to more of their computers. When that happens, and I can buy an HP and a sale price without Windose, I just might. I refuse to pay for software (windows) that I am not going use.
Think I misunderstood you a couple of days ok, when you said Dr Doug maybe got fired from M$. Yes, maybe he did work for them, and got canned. He sure did a lousy job of promoting it. But, as bad as DR, Doug did, he was infinitely better than Andre and his new clone here. Now there's two that M$ should have laid off. LOL
Posted by Chips B Malroy | February 5, 2009 10:05 PM
@ Chips B Malroy :Think I misunderstood ...
no problems at all, chips.
Posted by Marco | February 6, 2009 3:49 PM
I just stumbled across the following. If it works, it will remove the only reason I can think of to not get a netbook and install Ubuntu on it. The information is up-to-date and the package is fairly actively developed. The review:
www.berryreview.com/2009/01/08/advanced-barry-blackberry-sync-for-linux-gets-a-nice-homepage-documentation/
and the main page:
www.netdirect.ca/software/packages/barry/
Re: "Customers don’t want Linux on those machines."
That's great news. It means that the virus writers will continue to torture and torment the Windows users, and we, the few, can continue to work unmolested.
Posted by Philosopher | February 6, 2009 6:52 PM
There's something very funny about these numbers. Microsoft only sold 100-150 million copies of Vista last year which is around 30-40% of the number of new computers purchased. Usage statistics confirm these numbers. Around 40-50% of computers were replaced in the last two years, and a little under half of the new ones are running Vista, giving it an overall usage share of around 20%.
If Vista was 81% of Windows sales, then either these numbers are completely wrong, or half the people bought a computer with no OS and installed XP.
These numbers don't make any sense whatsoever.
Posted by Ari | February 7, 2009 2:21 PM
"mininotebooks"
They are already trying to differentiate the market because their OS is too expensive and bulky for cheap netbooks.
They are trying to make cheap netbooks look bad by putting a terrible, intentionally crippled version of Windows on it so that people go for the more expensive mininotebook with a $60 W7 license instead of a cheap XP or Starter one.
Within 6 months of 7's launch we will hear stories about how customers are shunning the low powered netbooks and settling for the better mininotebooks. I expect Andre will be proclaiming how mininotebooks offer a richer experience than netbooks. Meanwhile the reality will be that netbook sales will be eating Microsoft's profits.
Posted by billybob | February 8, 2009 1:37 PM
A cheap car is cheap because the manufacturer couldn't put more work/time/money/material to improve it.
Microsoft had the opportunity to release a good product, but put active effort to cripple it.
That's wrong and imoral.
In fact, all the Windows 7 "versions" are crippled: after all, the code for Windows Ultimate is locked into the DVD, and to uncripple your software you just have to pay more.
Posted by foo | February 10, 2009 2:03 PM
I should mention that I am a Mine Sweeper Certified Engineer and I would troll myself to death (bluescreen style) if lunix ever grew another 0.005%, so I must convince everyone to look at the new shiny win-7 ... and please ignore my claims in the past that vista was the best OS evar, this time I really mean it.
Now excuse me, I must go and google on msn-live-search for some more quotes to support my ramblings (which I of course will post here within minutes of me discovering them)
Posted by Rídley | February 23, 2009 6:13 PM