Microsoft's aching Windows 8 hangover

Having spent the holidays in the frigid Midwest, I'm not unfamiliar with the site of a car spinning its wheels on an icy road. And that's exactly what Microsoft looks like these days, as sales of Windows 8 PCs and Surface RT tablets slip and slide every way but up.
Yes, it's early days. Windows 8 didn't launch until late October, so there's plenty of time for sales to improve. Still, it's not much of an exaggeration to say that every nearly every week since Thanksgiving has contained a dollop of distressing news for Microsoft.
[ Got a Windows 8 PC and are frustrated by the lack of the Start menu? Here are 9 apps to get it back. | Stay abreast of key Microsoft technologies in our Technology: Microsoft newsletter. ]
Consider these news bytes:

• Last Friday, an online data and ad company found that Surface RT tablet users accounted for less than 0.25 percent of Web traffic during the weeks before Christmas, while users of Apple's iPad tablets still generate more than 87 percent of U.S. and Canadian tablet Web traffic.
• On Thursday, the CEO of Japan's biggest provider of computer services said Fujitsu will miss its annual shipment target for personal computers amid slow demand for Microsoft's Windows 8 operating system.
• The week before, Acer's America's president Emmanuel Fromont said, "It's a slow start, there's no question." At the end of November, Asus CFO David Chang said, "Demand for Windows 8 is not that good right now."
• In early December, four weeks after its launch, Windows 8 had just a 58 percent share of Windows PCs sold during that period, while Windows 7 took 83 percent of Windows sales in its first four weeks, according to NPD, a research firm whose market share data I find to be accurate. (There's a lot of iffy data repoprted as fact because many companies don't report actual sales to customers, leaving analysts to try to figure it out on their own.) Of course PC sales have declined under Windows 8, so it was a smaller piece of a smaller pie.

Yes, Dell chairman Michael Dell said interest in Windows 8 was "quite high" in mid-December, and Microsoft CEO Steve Ballmer says demand for Windows 8 is beating Windows 7 demand. I find that almost impossible to believe, and I suspect Ballmer's numbers contain a good deal of misleading information, as my colleague Woody Leonhard argued in late November.
There's no excitement in the PC market
Shortly before Christmas, I stopped at a Best Buy store on the edge of San Francisco's Mission District. The wait to close the deal on a new iPhone or Android smartphone was about 45 minutes, but a few aisles down there was almost no one checking out the variety of Windows 8 PCs and tablets on display. Ordinarily I wouldn't set much store on one experience, but the pattern tracks with the remarks of the Asian PC makers' execs and with NPD's sales statistics.
It also tracks with Amazon.com's list of the top 100 sellers in consumer electronics. There are just two PCs listed in the top 100 devices sold as of yesterday, with the Apple 13-inch MacBook Pro at No. 82 and a Dell Inspiron running Windows 7 at No. 87. If Amazon sold iPads and iPhones, I suspect the PC wouldn't have even made the top 100 best-selling consumer electronics devices.

Brendan Barnicle, an analyst at Pacific Crest Securities, told the New York Times that tablets were sapping the growth of laptops, which represent the biggest chunk of computer sales. "Tablets are doing to the laptop market what laptops did to the desktop market," he said. "They're not going away."
Yoshihisa Toyosaki, a Tokyo-based analyst at Architect Grand Design, is even harsher. He told Bloomberg News that "we can't be optimistic about the PC industry. ... PC makers' bet on Windows 8 has failed, as cheaper tablet computers are taking away customers."
In the background, of course, is the continued softness in the global economy, particularly in Europe. Even in the best case, many consumers and businesses would be slow to replace existing PCs. Microsoft has not given individual buyers a reason to spend money on a product that's more expensive, heavier, and a lot less cool than a variety of mobile devices. As to businesses, Microsoft's decision to radically change the Windows UI means that users will have to be trained and will likely need ongoing support -- hardly a selling point.
Surface RT barely on the radar screen for online usage
Measuring the usage of devices is not the same as measuring sales, but it yields some insight into the popularity of different tablets. Judging by a new report from Chitika, Microsoft's Surface RT tablet barely makes an impression.
Chitika compared tablet impressions (that is, requested Web pages) from non-iPad devices against iPad impressions for the second week of December. Chitika's chart shows that Amazon's Kindle Fire did the best of the non-iPad tablets, generating 4.88 impressions per 100 iPad impressions. To be clear, that means that for every 100 pages called by an iPad, 4.88 were called by the Kindle Fire. Samsung's Galaxy tablets came in next with 3.04 impressions, and Google Nexus tablets came in third at 1.22 impressions. The Surface RT scored just 0.22 impression out of every 100 iPad impressions.
The soon-to-be-released Surface Pro, which runs Windows 8, will probably be more popular, but given its relatively high price, it doesn't seem likely to garner huge sales.
The Christmas selling season brought no joy to PC makersI've never seen executives of major PC makers rain on Microsoft's parade the way they have in the last two months. Part of the reason is probably pique. Microsoft irritated its partners no end by taking the unusual step of manufacturing its own tablet and becoming their direct competitor.
If Windows machines were selling well, they'd get over it -- but it appears they are not. I don't know what Steve Ballmer did over the holidays, but it's a cinch it wasn't his best Christmas ever.