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Windows 10 no savior for slumping PC market

Windows 10 adoption won't spur the PC market as many users rely on tablets and other Windows mobile devices.

Windows 10 has been well received since its launch in late July, but industry analysts don't expect Microsoft's new operating system to turn around the PC market.

"We see desktops shrinking overall," said Jay Chou, an industry analyst at Framingham, Mass.-based research firm, IDC. "Windows 10 won't change that in the near future."

The overall PC market will continue its decline throughout 2015. The rate of decline may improve slightly as time goes on, though not dramatically, Chou said.

"[Windows 10] helps to at least reduce a lot of the negativity surrounding Windows 8 and PCs in general. … But will that lead to new PC sales? I don't think so," he said.

The worldwide PC market saw an 11.8% decline in Q2 this year, according to IDC, shipping just over 66.1 million units, down from nearly 76 million in Q2 of last year. Some major vendors that took significant hits include HP, which saw a 10.4% decline in shipments, according to IDC, and Acer Group, which shipped nearly 27% fewer units from the year-ago quarter.

"It's a slog," Chou said. "It's very competitive and we don't see much interest picking up anytime soon."

Why Windows 10 won't help

There are several compounding factors plaguing the PC industry that Windows 10 won't change, Chou said. The average lifecycle of PCs has stretched even longer in recent years, meaning enterprise customers are replacing their machines less frequently. Internationally, vendors have faced stiffer exchange rates, forcing them to raise prices and causing buyers to adjust spending.

Jack Narcotta, industry analyst at Hampton, N.H.-based Technology Business Research, Inc. (TBR), says that not only are the lifecycles of machines lasting longer, but the lifecycles of operating systems are as well. Many businesses are still running Windows XP, he says, whereas others have just recently upgraded to Windows 7. Narcotta says these companies will not upgrade their OS for quite some time, and the only way to interrupt that lifecycle is for a Windows 10-exclusive business application to gain prominence in their industry.

We won't see a giant 'hurrah' moment like we did with Windows 95.
Wes MillerResearch Analyst, Directions on Microsoft

"That, far and away, is the biggest challenge," he said. "Windows 7 and Windows 8 are good enough. There isn't yet that killer app that's only on Windows 10."

The enterprise will adopt Windows 10 when it has a wholesale customer relationship management application that has a connection into everything that's going on, Narcotta said.

"If there is an industry-wide application outside of the traditional Microsoft products, then you'll see more upgrades," he added.

Wes Miller, a research analyst at Kirkland, Wash.-based Directions on Microsoft, agrees that in business, there will be more of a gradual adoption rate for Windows 10, adding, "We won't see a giant 'hurrah' moment like we did with Windows 95."

Windows, the most-widely used enterprise PC operating system, now has a feature called Continuum. It changes how the OS behaves based on device type, which makes Windows 10 more touch-screen friendly and able to take advantage of 2-in-1 devices.

The popular Continuum feature is a sign of the mobile market taking command over PCs, Miller said.

"Continuum is about the PC adapting to the user," Miller said. "It was about [Microsoft] adapting to the user as well … it adapted the OS to suit the needs of the users. It's a sign that mobility is a prominent thing."

Narcotta of TBR speculates some of the bigger vendors in the industry -- specifically, HP, Lenovo, and Dell -- should be able to take the punches of a longer enterprise PC lifecycle, but smaller vendors will invest in other emerging markets, including mobile.

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