Why a slower-than-expected fall in PC shipments helps Microsoft (Part 4 of 5)
Microsoft to end its XP support
In the last few articles of this series, we discussed how the worldwide PC market saw a slower-than-expected decline, while the U.S. and EMEA PC markets saw an increase. We also discussed how this is good news for Microsoft (MSFT), as it’s the dominant player in the PC operating system and productivity software market, while Lenovo (LNVGY), HP (HPQ), and Dell (DELL) are the top three players in the worldwide PC market. The main reason Gartner cited for this improvement in the PC market was the end of Microsoft’s XP support, which led to a PC refresh cycle at enterprises across the world. The end of this support means Microsoft will no longer provide security patches and updates to protect the OS from viruses, malware, and other threats.
Surprisingly, Microsoft XP is still present on 28% of PCs
Even though Microsoft had warned in advance that it would withdraw its support for Windows XP by April 8, according to the Wall Street Journal citing Net Applications, nearly three in ten computers were still running XP as of March. This insight is based on data collected from 160 million unique visits to 40,000 websites per month. According to the above chart, 49% of worldwide PCs had Windows 7 as their operating system, 28% had Windows XP, 11% had Windows 8, and less than 4% had Apple’s (AAPL) OS X. Apple’s small share in the PC operating system market shows that it’s still a niche player.
The end of XP support will trigger a PC refresh cycle and benefit Microsoft
The end of Microsoft’s XP support has already triggered a PC refresh cycle for enterprises. So the PC market declined at a slower rate than expected in Q1 2014, which we’ve discussed in the previous articles of this series. However, if three out of ten PCs still have XP as their operating system, with time, these PCs operating systems will also be replaced due to security issues. This replacement would benefit Microsoft, as it will require new software licenses from Microsoft.
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