Did the free Windows 10 upgrade push hamstring PC sales?

PC sales have dropped—four quarters in a row—and IDC says the Windows 10 giveaway is one reason why.

Did the free Windows 10 upgrade push hamstring PC sales?

It has always been tradition with a new Windows release that there is both an upgrade path for some users with the smarts to do it and the guts to risk it, while those preferring a safer path would just buy a new PC with the new operating system.

So, what happens when Microsoft practically shoves a new OS down people's throats, pesters people to upgrade and even performs upgrades they didn't ask for? Well, that gets the installed base to 300 million in under a year, as Microsoft recently announced. It also kneecaps the PC market for new desktops.

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New research from IDC projects PC shipments worldwide will decline by 7.3 percent in 2016 over the previous year, 2 percent worse than was previously forecasted. Also, in Q1 of this year, sales contracted by 12.5 percent, more than the 11.3 percent previously expected.

Q1 is always a slow quarter, as the industry takes a breather from the busy fourth quarter Christmas sales, but a 12.5 percent drop is painful. This is the fourth straight quarter of double-digit drops in PC sales, making for very tough times in the PC vendor market.

Reasons for the drop in PC sales

IDC cited several reasons for the headwinds: Chromebooks, companies testing Windows 10 and slowing their purchasing habits, and the economy. But it also said the Windows 10 giveaway was part of the problem.

"The financial pressure on consumers across regions, and the availability of alternatives such as delaying a PC replacement by using a free Windows 10 upgrade or relying more on other devices continues to pressure consumer PC shipments. Similarly, while a large share of enterprises are evaluating Windows 10, the pace of new PC purchases has not yet stabilized commercial PC shipments," IDC said in a statement.

In some ways, Microsoft did users a great service by keeping the minimum system requirements for Windows 10 equal to the last three versions of Windows. So, you can get Windows 10 running on some fairly old hardware, and people were happy to take the freebie upgrade offer rather than buying a new system.

I recall how with the Windows 7 launch, Best Buy had a huge inventory of new hardware to go with the new OS ready on launch day, and there was a full-court press to promote new machines with Windows 7. It had tremendous buzz from its well-received beta and sold quite well. That didn't happen with Windows 10. Hardware vendors couldn't compete with Microsoft giving away the OS, a key driver of PC sales.

For an industry built on planned obsolescence (and let's not kid ourselves, that's how high tech works), not needing a hardware upgrade is a bad thing. The PC upgrade cycle used to be about three years. In other words, you upgraded to a new box every three years. Now, Intel CEO Brian Krzanich says it has slowed to five or six years.

The irony here is his company created this scenario. Intel CPUs are so powerful that you can get by just fine on a 4-year-old CPU, unless you're a hardcore gamer. And even there, it's the GPU that does most of the work. An office worker sure doesn't need a new PC with a Skylake CPU on it. A Sandy Bridge-generation CPU from 2011 will do just fine.

Even I, a hobbyist and gamer who relentlessly upgrades, can't justify an update to my system. Nothing I'm playing taxes the system especially hard, and a new CPU or SSD would barely boost speed. The days of seeing a notable burst of speed from a new system are over. Now we've reached a point where people replace them only when they break.

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