Microsoft Says Windows 10 User Goal Won't Be Met
July 15 2016 - 3:34PM
Dow Jones News
By Jay Greene
Microsoft Corp. won't hit its target of one billion Windows 10
devices in use by June 2018, the company said Friday. It blamed the
shift on its decision to scale back from the business of making
smartphones that would have run Windows 10. It didn't propose a new
date for meeting the one billion benchmark.
"We're pleased with our progress to date, but due to the
focusing of our phone hardware business, it will take longer than
[the end of June in 2018] for us to reach our goal of one billion
monthly active devices," the company said in a statement.
The company set that goal just before launching the latest
version of its flagship operating system last summer.
In May, Microsoft said it would lay off 1,850 workers and take a
charge of about $950 million in its smartphone business. Those
steps were part of dismantling the 2014 acquisition of Nokia
Corp.'s handset business, a move intended to secure Microsoft's
position in the phone market that never materialized.
Nonetheless, Windows 10 uptake has moved at a record pace
relative to earlier versions. In June, Microsoft said that more
than 350 million devices ran the operating system. Adoption climbed
16.7% since early May.
But even that relatively rapid rate would have to rise to result
in one billion active Windows 10 devices by mid-2018. Microsoft
would have needed to post an average compounded quarterly growth
rate of roughly 19% to meet its goal.
"They made a bit of an error by throwing the number out there
and inviting everyone to track it," said J.P. Gownder, a Forrester
Research Inc. analyst.
Mr. Gownder believes Microsoft will reach the one-billion-device
target, but not until the beginning of 2020. And while the "major
culprit" for the target miss was a faltering Windows phone
business, he noted potential "softness" in sales of personal
computers to consumers.
Microsoft is offering free upgrades to Windows 10 for devices
running Windows 7 or Windows 8 until July 29. After that, consumers
who want the latest version will have to pay $119 to upgrade
devices that aren't already running Windows 10 or buy new devices.
That could slow the pace upgrades for consumers.
"That part of the market," as opposed to corporate customers,
"is a bit of question mark after July 29," Mr. Gownder said.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
July 15, 2016 15:19 ET (19:19 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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