Microsoft executives continue to claim that the PC, once eclipsed by smartphones, is enjoying a renaissance – thanks to the new era of hybrid working.
During Microsoft’s third-quarter fiscal 2022 earnings update on Tuesday, the company revealed that its Windows OEM business grew 11% year-over-year, while Surface revenue increased by 18% compared to the corresponding quarter in 2021.
Microsoft chief Satya Nadella underscored the high importance of the PC to people as it touches more aspects of life, from online videos to gaming and working at home and sometimes in the office.
“The PC has never been more relevant to work, life and play. As the number of use cases increases, so does the time spent on PCs,” Nadella said during yesterday’s results call.
He said “more than 100 million PCs have been shipped in each of the last eight quarters” and that “Windows continues to play its part.”
Nadella said as the number of use cases increases, so does the time spent on PCs.
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“For consumers, Windows is essential for organizing our content and services to help everyone in their daily tasks, from browsing and research to learning, gaming and shopping, all with security and privacy built in. We’re seeing strong engagement, with nearly 500 million monthly active users of our personalized content feed, Microsoft Start. As usage continues to grow, we’re seeing a flywheel emerge between the content, consumption and commerce as we generate new opportunities for content creators, as well as advertisers.”
According to technology analyst IDC, the first quarter of 2022 was the seventh consecutive quarter in which global shipments of desktops, laptops and workstations exceeded 80 million units, although this figure – which peaked to 91 million in Q4 2020 – excluded tablets and detachable tablets. IDC noted that the remarkable aspect of the first quarter was that the industry was able to produce more than 80 million PCs despite global chip shortages.
However, analyst Canalys found that PC shipments in the US grew only 1% year-over-year in 2021. It also followed a massive 28% year-over-year decline. on the other laptop sales in the fourth quarter of 2021 and a 31% drop in tablet sales for this quarter. Consumer sales are slowing and the education market is saturated.
But both analyst firms noted continued strong demand among commercial PC buyers, with Dell shaping up to be the big winner in this market.
Despite some vendor reports that Windows 11 adoption is currently low, Nadella said enterprises are adopting Windows 11 “at a faster rate than previous versions.” He noted that with Windows 11, Microsoft continues to show the highest quality scores of all versions of the operating system.
SEE: Microsoft upgraded 190,000 PCs to Windows 11 (but even they couldn’t upgrade everything)
Nadella was reiterating what Microsoft devices boss Panos Panay said in January, when he announced a “new PC era” and that there were 1.4 billion active devices per month, with a time overall spent on Windows 10% above pre-pandemic levels.
“A new hybrid infrastructure now exists – across work, school and life – allowing more flexibility in where and how people spend their time. And the PC is the hub,” Panay said. at the time.
It may be a new era for the PC, but Microsoft knows the outlook for Windows and the PC isn’t as rosy as it has been for the past couple of years.
“In Windows OEM, we expect revenue growth in the low to mid-single digits, driven by the continued transition to a commercial-dominated PC market where revenue per license is higher,” said Amy Hood, director financial from Microsoft.
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