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Boutique PC seller laughs all the way to the bank on the back of Windows 7

Gregg Keizer | May 21, 2013
Bucks sales slump with high-end PCs running 2009's OS.

A boutique system builder has bucked the industry trend of slumping PC sales by continuing to focus on selling Windows 7 machines.

Auburn, Wash.-based Puget Systems grew sales 20% in 2012, said Jon Bach, president of the independent PC seller, by specializing in high-performance, buit-to-order PCs -- primarily deskstops.

Puget's performance is in stark contrast to the global PC market, which contracted 6% in the fourth quarter of last year, and plummeted 14% in the first quarter of 2013, according to research firm IDC.

Puget also went against the grain by selling significantly more Windows 7 PCs than ones equipped with the new Windows 8. That was not a strategy of its own choosing, however, as customers select the operating system for their custom-built machines.

Major OEMs (original equipment manufacturers) like Hewlett-Packard, Lenovo and Dell took a different tack, going almost exclusively with Windows 8 on new consumer PCs starting last October. The current retail channel remains predominantly Windows 8 territory. (The same OEMs continue to sell Windows 7 systems to business customers, however.)

"For the first few months, demand [for Windows 8] slowly picked up, from virtually zero to about 30% of sales," said Bach of the post-October 2012 launch. "But then it settled at about 20% of sales and has stayed around there since March." Virtually all of the remainder -- around 80% and holding steady -- that Puget sells are powered by Windows 7.

The continued lure of Windows 7 didn't surprise Bach, who, like most critics, said that the problems with Windows 8 made its 2009 predecessor seem all the more attractive.

"After having spent extended time with [Windows 8], I can understand many of our customer frustrations," said Bach. "There isn't anything that is a show-stopper in the UI [user interface], but it gets in its own way a lot of the time. I find myself thinking about the UI and how to use it to make it do what I want, which I think is the sign of a bad UI."

Not surprisingly, given the sales share of Windows 8, few Puget customers have equipped their new PCs with touch-enabled displays, even those asking for Windows 8. Microsoft built Windows 8 with touch in mind -- its tile-style "Modern" UI is tough to use without touch capabilities -- and it and independent analysts have put some of the blame for slow sales on a lack of affordable touch PCs.

"We are not seeing a pickup in touch display interest," said Bach. "I would expect touch to be of more interest with laptops and tablets. [But] our laptops are not touch enabled, and yet our laptop sales were up 50% last month. Go figure."


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