Black Friday Shows How Much Microsoft Has Changed The Market

There are conflicting reports as to whether Windows 8 has sparked any life into slumbering PC markets, but information that has become available shows how Microsoft is reshaping the market.

While last week figures showed that Windows 8 sales were sluggish, a retail survey from Global Equities Research analyst Trip Chowdhry claims that Sony, Dell and Acer appear to have had a successful Black Friday.

Chowdhry said that the three manufacturers cleared a large number of Windows 8 PCs last week as consumers endured massive crowds and long lines on the biggest shopping day of the year.

Although this seems to suggest that customers were only buying the PCs because of famous Black Friday cost cutting. But it does indicate that Acer and Sony did well.

According to Chowdhry, this year was great for Microsoft’s own retail channel with its name brand stores cleaning up.

He said that Microsoft Stores benefited from the fact it had a “very strong promotion” on the Acer Aspire V5 notebook and sold it for $399.

Each Microsoft Store had about 500 units and they were completely sold out within the first 30 minutes.

They also sold out of a $1,500 touch-enabled Ultrabook from Sony which was the Sony Vaio Touch Intel i7 was the fastest selling Windows 8 notebook in the high-end category.

The fastest-selling all-in-one Windows 8 desktop on Black Friday, Dell’s XPS One 27 was also sold out completely at $2,000.

But there were some warnings for Microsoft dealers. Chowdhry thinks that one in five sales on the Surface RT were lost because of the ARM chipset.

He thinks that if Microsoft first shipped Surface on Intel chips instead of on ARM chips, sales of Surface would have been 5X better than current levels.

However Chowdhry thought Microsoft “had decent sales on Windows Surface RT” anyway.

He claimed that there was a lot of interest in Microsoft Surface, but interest was not necessarily leading to sales. Most of those he spoke too were prepared to wait for the Pro to come out.
But all this is pointing to a sea change in the way Microsoft gets its goods to consumers, something which should worry resellers and hardware makers.

Windows watcher Paul Thurrott pointed out before Black Friday that Windows 8 sales were missing targets and Microsoft was internally blaming PC makers for Windows 8’s slower-than-it-expected start and he said manufactures inability to deliver was probably the reason why Redmond felt it needed to start making its own PC and device hardware.

In other words, the slow Windows 8 start was justification for Microsoft to enter the hardware market to give manufacture a kick up the bottom and get itself into the business.

If this angered manufacturers, Microsoft’s setting up of its own retail channel angered its current partners. But what must be worrying them now is that Black Friday showed that Microsoft’s retail store expansion proves its own retail channel was sensible, even if it was written off initially as a half-hearted attempt to copy Apple.

And while both actions had soured Microsoft’s traditional partner relationships it appears to be paying off in some of the most trying times for the channel.

Microsoft launched its most radical Windows incarnation at a time of economic uncertainty and in the middle of business deployment of the product’s predecessor, Windows 7. It knew that getting businesses to adopt Windows 8 early was a non-starter so it had to pitch to the consumer. Putting out its own hardware, and pushing its own retail channel, might have been a winner in the short term.
But Microsoft will find itself in a risky position next year. While it might have effectively spearheaded the sales of its software, and might have forced its hardware suppliers to pull finger, it has angered both and it is that which will ultimately decide if Windows 8 will be a success.

Microsoft cannot produce enough hardware and its stores will never match those of its retail partners. So it will have to make some fast moves to reassure them the New Year that it is not interested in competing to much with them if it wants to guarantee their loyalty.