Microsoft may be using creative accounting to paper over poor sales, but don't believe the hype that it'll lead to Ballmer's ouster
The Windows world is rocking with news that Microsoft CEO Steve Ballmer told the French-language daily Le Parisien that sales of the Surface RT tablet "are starting modestly."Unfortunately, the original interview hasn't been published online, so it's hard to tell precisely how Ballmer may have phrased or couched that comment, and as usual, there's absolutely nothing official emanating from Redmond.
That hasn't kept the tar-and-feathers crowd from speculating about Ballmer's imminent departure. Lowered Windows client sales, the litany goes, will lead to a shareholder revolt, driving everyone's favorite CEO whipping boy to retreat, tail between legs.
Hogwash.
Ignoring the fact that the Windows client cash cow has been tilting toward the glue factory for years, you can bet that Microsoft's going to post stellar Windows unit sales numbers for the fourth calendar quarter of this year and the first calendar quarter next year. The accountants already have the numbers lined up, with plenty of rediscoverable income already built into last quarter's 33 percent decline in Windows Division revenue and lots of fuzzy counting questions about free and low-cost upgrades, as well as volume licenses.
All signs point to the Surface with Windows RT selling slowly. With only two manufacturers offering Windows RT products, any sizable demand for either the Microsoft or Asus products should've led to widespread shortages. Microsoft ran out of its cheapest Surface RT -- $499 for 32GB with no cover/keyboard -- for about a week. The identical machine with a black touch cover ($599) has always been available for immediate delivery. I've never seen a single "not available" notice on an Asus Windows RT machine.
I don't expect to see sales for the Surface RT to pick up, even over the holidays. With widespread reports of Touch Cover keyboards that split open like Gallagher's watermelons, Metro apps that continue to underwhelm, complaints of rampant advertising in the apps (gimme a break -- the Metro Music and Video apps are nothing but wall-to-wall advertisements), and reported audio stuttering and spontaneous muting problems, not to mention demonstrably lethargic performance and rumors of astronomical return rates, the Surface RT version 1.0 may well be circling the drain.
What about Windows 8 sales? Microsoft isn't in the Windows 8 hardware game yet, with Surface Windows 8 Pro not expected until next year, but we haven't heard any solid statistics about Windows 8 sales on non-Surface hardware.
Two weeks ago, Ballmer was widely quoted as saying that Microsoft has sold "more than 4 million upgrade copies" of Windows 8 during its first weekend of availability, but as I explained at the time, that number could include just about anything. It isn't even clear if Ballmer claimed that 4 million copies of Windows 8 had been installed over the weekend or if the number is an odd mish-mash of disparate statistics. Once again, there's been no official word from Microsoft.
I figure we won't really know how well Windows 8 is selling until we see statistics about the number of computers HP has sold this quarter. Why HP? The company has declared that for all new machines sold after October 26, "Windows 7 will not be supported on these new platforms, and no drivers, apps, or Windows 7 content will be available through HP." If you go to the HP order site for "Everyday computing," five of the six top PCs on offer run Windows 8. The lone holdout, a 15.6-inch i3 640 GB Notebook, comes with the ancient 64-bit version of Windows 7 Home Premium. (Ingrate.)
Your opinion may vary, but I figure that's the dumbest marketing move I've ever seen from a major PC manufacturer. Sorry, Meg.
The proof's in the peddling. Let's look at HP's PC sales statistics for November and December when they're available and see how the gamble played out. My bet's on Windows 7-friendly Lenovo rolling all over HP.