Windows 8 Off to an Awkward Start, Analyst Says

PC vendors have been slow to launch devices powered by Microsoft's latest operating system.

Microsoft's Windows 8 debut is off to an "awkward" start, Nomura analyst Rick Sherlund said.

The software giant last month launched the latest version of its operating system that sports a UI featuring a healthy proportion of tablet-inspired components such as touch capabilities. However, analysts have criticized the platform for being confusing, as well as playing its part in ailing PC growth.

Sherlund said PC vendors have evidently been slow to introduce new devices such as tablets and ultrabooks with touch screen support. Moreover, Windows 8 has a learning curve, as well as the fact that it's faced "abundant bad press."

Consequently, Nomura decreased its forecast for PC unit sales during the current quarter, noting that sales should drop by 7 percent instead of being flat.

In looking at Microsoft, we have assumed essentially no growth going forward in traditional PCs (or actually down about 6 [percent] if we exclude new ultrabooks) and the more relevant market growth of about [3 percent to 5 percent] if we include Windows-based tablet devices. We assume that many consumers will prefer an iPad to a Windows device, but that Office is still an anchor for enterprise and prosumers that may chose to upgrade notebooks to either ultrabook touch or tablet/hybrid devices for longer battery life, thin, light-weight and touch that addresses the desire for new form factors and new tablet based usage and apps. 2013 could be a good upgrade year for old notebooks.

In addition, Sherlund cut his estimates for Microsoft's earnings in 2013 by around 4 percent, stating per-share earnings will grow by just 8.5 percent. That said, he stressed that Microsoft's stock has already reflected the "awkward" launch of Windows 8.

"We think investors that can have a thick skin through the awkward quarter or two of the Windows 8 transition will likely see better traction ahead," he stated.

Despite the negativity surrounding Windows 8, Microsoft has sold 40 million licenses for the OS since its October 26 launch. Comparatively, 60 million Windows 7 licenses were sold during its first two months of sale.

More than half of consumers are said to have not heard of Windows 8, while those who are aware of the platform not having an interest in the OS.

Source: tomsguide.com