According to Microsoft , Windows 8 has now sold 60 million licenses to date, a figure that includes upgrades and sales to original equipment manufacturers. Back in November, Microsoft had reported that 40 million copies of Windows 8 were sold. In other words, about 20 million copies were moved in a little over a month. Doing the quick math leads investors to believe that the holiday quarter was a complete knockout for Microsoft and overall PC sales. It implies that pent-up demand for PCs is rather robust, and Gartner's estimated 8.3% decline in PC shipments in the third quarter was likely the near-term bottom. However, getting into the details gives investors a better sense of what's really going on.
Promotion, promotion, promotion
Windows 8 has been promoted since June 2, 2012 -- about 4 months before it was released to the general public. If you purchased any PC running Windows 7 since then and still through Jan. 31, you are eligible to purchase Windows 8 Pro for $14.99. For those of us who did not purchase a Windows 7 machine during this time, you can download a copy for $39.99.
History did not repeat itself
Looking back at the Windows 7 launch shows just how much business has changed for Microsoft. Back then, it was specific PC manufacturers that opted to provide free upgrades from Windows Vista PCs, although Microsoft likely cut a deal with OEMs behind the scenes. In an effort to improve initial reception, Microsoft reduced upgrade prices to $49 for Windows 7 Home Premium and $99 for Professional for a limited time from the standard $119 and $199 (respective) pricing.
60 million copies? No kidding!
I'm not surprised that Windows 8 unit sales are on a similar trajectory to Windows 7. Microsoft's promotional period, still going on today, allows it to capture a large no-brainer upgrade base. This helps Microsoft to report strong up-front Windows 8 unit sales. What the company fails to mention is how this figure came at the expense of its average selling price, which has dropped substantially since Windows 7 Pro's debut.
I'm left wondering how many of these licenses were part of the Windows 7 no-brainer group who paid only $14.99. That said, investors should take Windows 8 unit sales and implied PC sales as a grain of salt until earnings are released on Jan. 24.
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The article Is Microsoft Misleading Investors? originally appeared on Fool.com.
Fool contributor Steve Heller has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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