PC prices must rise, not fall, to solve Windows 8's lousy start, analyst argues

OEMs to blame for poor Windows 8 sales over the holidays, says retail expert

By , Computerworld |  Hardware, computers, windows 8

"It won't be easy, but it's doable," Baker said of computer makers' need to talk customers into paying more for a credible Windows 8 laptop. "There's evidence that it can be done. Before 2009, people willingly paid $600 to $700 for computers, and that was with a crappy operating system, Vista. But you need the right product."

As an example, Baker gave a nod to Lenovo's IdeaPad Yoga 11, a $799 hybrid that runs Microsoft's Windows RT, the tablet-oriented spinoff of Windows 8.

Baker was optimistic that the computer industry would take note of 2012's data, and learn the lesson that they must persuade consumers to spend more.

"They see it in the sale numbers, customers are telling them that," Baker said. "I think they'll recognize where prices have to be. But more than ever, PC makers have to make the argument that the Swiss Army knife of the PC has value, that it can handle productivity and entertainment that tablets can't quite match yet."

During the holidays, NPD's tracking showed that sales of touchscreen-equipped notebooks broke into four almost-equal parts, with a quarter of sales in the under $500 range, a fourth in the $500 to $700 category, 25% in $700 to $900, and the final quarter priced above $900.

"They're the kings of adaptability," Baker noted of OEMs. "The real issue is going to be patience. Moving into higher prices is something very different from what they've been doing. The business got stagnant, and they were using a big price crutch to sell PCs."

Baker maintained that the shake-up of Windows 8 would be good for the business, although with his "patience" mantra, not immediately.

"Things won't improve, certainly in the first half of the year," he said. Windows 8's next shot at improving PC sales: The back-to-school selling season, which typically kicks off in June and runs through September.

"I think there's still enough optimism [among OEMs] about Windows 8," said Baker.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

Originally published on Computerworld |  Click here to read the original story.
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