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HP sticks thumb in Microsoft's eye, discounts consumer Windows 7 PCs

Gregg Keizer | Jan. 21, 2014
When sales are hard to come by, every little bit helps, says analyst.

Hewlett-Packard today launched a new online promotion that discounts several consumer PCs by $150 when equipped with Windows 7, saying the four-year-old OS is "back by popular demand."

"The reality is that there are a lot of people who still want Windows 7," said Bob O'Donnell, chief analyst at Technalysis Research, in a Monday interview. "This is a twist, though, and may appeal to those who said, 'I do want a new PC, but I thought I couldn't get Windows 7.'"

HP has not discarded Windows 8.1 -- the perception-plagued dual-UI operating system -- nor resurrected Windows 7 from the crypt: The PC seller, like every other OEM (original equipment manufacturer) in Microsoft's orbit, has never stopped selling Windows 7.

But HP was the first major OEM -- it was the world's second-largest in the fourth quarter of 2013, according to research firm IDC -- to blatantly market Windows 7 PCs to consumers since Windows 8's first few months, said O'Donnell.

HP's selection of Windows 7 consumer-grade machines is small, just five models: Two notebooks and three desktops, with discounted prices starting at $480 and topping out at $1,000. By comparison, HP listed 68 different Windows 8 and Windows 8.1 laptop, desktop and hybrid models on its for-consumer website Monday.

On the business side, HP and others, including No. 1 Lenovo and No. 3 Dell, continue to market Windows 7-powered PCs first, Windows 8 and 8.1 systems second, recognizing that corporations will stick with the 2009 OS for years to come.

From O'Donnell's viewpoint, HP's move was not so much an admission that Windows 8 and 8.1 are flawed -- even though he argued they are -- but an attempt to grab sales wherever it can after a year when PC shipments plunged 10% and are projected to slide again in 2014. By IDC's estimate, HP's U.S. shipments fell 12.3% last quarter compared to the year prior, while Dell's and Lenovo's climbed 5.6% and 10.8%, respectively.

Dell and Lenovo rely much less on sales to consumers, who have declined to buy new PCs as they shift to tablets, than does HP.

The promotion reminded O'Donnell and others of the dark days of Windows Vista, when customers avoided Windows 7's predecessor and instead clamored for the older Windows XP on their new PCs. Then, customers who had heard mostly negative comments about Vista from friends, family and the media, decided they would rather work with the devil they knew rather than the new one they did not.

"It's not a perfect comparison," said O'Donnell, of equating Windows 8 with Vista, "but the perception of Windows 8 is negative. I said early on that Windows 8 could clearly be Vista Version 2, and that seems to have happened."


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