Windows 7 Thrives as Mac OS X and Linux Are Weak Competitors

Makes Vista a thing of the past

By on April 26th, 2010 07:41 GMT
Windows 7 has sold in excess of 100 million copies in just the first six month since general availability, and is on track to adding an estimated 200 million more by the end of 2010. The fastest selling operating system in history has also acted as a panacea for its predecessor, Windows Vista, and is critically adding momentum to Microsoft’s dominance on the OS market. According to analyst company Technology Business Research, Vista’s time has come and gone, and the opportunity window it offered company rivals to push their own platforms to the detriment of Windows has been closed with Windows 7. Neither Apple, nor Linux distributors have been able to take advantage of Vista’s unpopularity in order to consistently increase their market share.

“Vista is a thing of the past - With a majority share of the PC operating system market, the best-case scenario for Microsoft was to retain the leadership position, and its results indicate it’s done just that. The long-term test for Windows 7 will be corporate adoption over the next two years, but at this point it appears Microsoft has weathered the storm of customer uncertainty created by Windows Vista. Despite fielding poor reviews from analysts, business customers and consumers alike, Microsoft managed to retain its hold on the operating system market due to weak competition and by leveraging its strong distribution partnerships. Vista customers may not have been satisfied with the product, but few better choices existed, and those that did were more difficult to find and purchase,” Allan Krans, senior analyst TBR, revealed.

Over 10% of the PCs worldwide are currently running Windows 7, according to data from Microsoft, but also from Internet metrics company Net Applications. Since October 2009, Windows XP’s market share dropped from 70.48% to 64.46%, while Vista’s diminished by almost 3%, from 18.83% to 16.01%. Despite this, Mac OS X’s share of the OS market continues to linger at about 5%, while Linux seems to be perpetually stuck at just 1%. To make things worse, TBR believes that Windows 7 will only reinforce Microsoft’s market dominance.

“While TBR does not believe Windows 7 demand drove the 25% increase in PC unit shipments during 1Q10, the product does go a long way toward reinforcing Microsoft’s position atop the PC operating system market. Though Microsoft cited strong demand for Windows 7 as driving its results during the quarter, in reality its performance was largely driven by the underlying PC market. After businesses and consumers postponed technology purchases during the recession, PC purchases improved for the second consecutive quarter, and Microsoft estimates that PC unit shipments increased by 25% year-to-year. Customers are beginning to replace aging PCs, and the wave of technology refreshing is lifting Microsoft’s boat along with the PC OEMs and associated supply chain partners,” Krans added.

According to Microsoft, Windows revenue was up 28% in the third quarter of the 2010 fiscal year, in which Microsoft announced revenue of $14.50 billion. The company also revealed that demand for Windows licenses exploded by no less than 35% worldwide. However, Krans warned that the growth wouldn’t last.

“Once the wave of recession-borne pent-up demand is gone, hardware unit shipment rates are likely to settle into more typical single-digit growth patterns, taking double-digit Windows revenue growth with them. However, the good news for Microsoft is that Windows 7 appears to be reinforcing its strong hold on the market. With a product that has garnered broadly positive reviews, Microsoft customers will have fewer reasons to seek alternatives, and will continue to face difficulties in purchasing alternatives due to the company’s strong distribution partnerships,” he stated.

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