Imperfect 10: What's behind Windows 10's slow start?

Context figures show just 150 machines pre-installed with Windows 10 were sold through European disties in its first week

It is hard to imagine that Satya Nadella has a great deal in common with Danny Dyer. But both the Microsoft leader and the cockney actor have, in recent years, endured similarly underwhelming openings. Dyer's notoriously poorly received 2013 picture Run For Your Wife grossed £747 in its opening weekend in UK cinemas. This equates to a total audience of 150, if we assume that each of those paid about £5 for such a dubious privilege. (Admittedly this is somewhat below the UK average price of £6.53, but this is a film that is below average in many ways.)

Windows 10 may have generated slightly kinder reviews, but its release into the European channel brought a similarly muted response from punters. Just 150 machines with the new OS pre-installed were sold through distributors across Europe in the working week of its Wednesday 29 July release date, according to market watcher Context. Just to clarify, there are no zeroes missing from that figure - that's one hundred and fifty, across the whole continent.

Perhaps unsurprisingly, that number does not even register as a fraction of a percentage of the total number of machines sold through distributors that week. This is a far cry from previous iterations of Microsoft's flagship product that have almost immediately attained a market share as high as 35 per cent, according to Context senior analyst Marie-Christine Pygott.

Nevertheless, the new OS's low-key opening in the channel is in line with what the market watcher had expected, and Pygott explains that a number of factors stymied initial sales through distribution partners.

"It is quite different to the previous launches when you had systems being stocked up in the channel for quite a while beforehand, and there was not the expectation that people would run into the shops to buy new systems with Windows 10," she says. "The code was also released relatively late to PC manufacturers."

Freefalling

The fact that Microsoft has chosen to provide the new OS as a free upgrade for existing users of consumer versions of Windows 7 and Windows 8.1 has also had a limiting effect on sales.

But perhaps the biggest inhibitor to channel sales is an ongoing inventory surfeit in European distribution. The distribution space across Europe began suffering a concerning build-up of stock earlier this year, and many countries are yet to see inventory reduced to healthy levels, Pygott adds.

"We are hearing that this is still an issue in Germany, where it has been pretty bad - although it might be starting to go down now," she said. "There have been issues as well in France, and in Spain it was pretty serious. Expectations are that it will go down slowly and gradually, and in Q4 we may see a better quarter."

150Number of PCs with Windows 10 pre-installed sold by European distributors during the operating system's launch week (Source: Context)

5.4 per centAmount of desktops across Europe that had installed Windows 10 as of 9 August (Source: StatCounter)

￡747Opening-weekend gross of 2013 Danny Dyer "comedy" Run For Your Wife (Source: BFI)

The fact that consumers can upgrade to Windows 10 free of charge could even give firms in the consumer channel a helping hand when it comes to purging themselves of ageing and unwanted stock.
"Most e-tailers and retailers will try to market old Windows 8 systems by saying ‘you can upgrade to 10 when you want'," Pygott predicts.

Outside the channel, early indications are that consumers in Europe have embraced the new OS - at least a little more so than they have in other parts of the globe. For the week commencing 3 August - Windows 10's first full week on release - the new OS had a 5.4 per cent share of the desktop installed base across Europe, according to figures from StatCounter. This compared with a global average of 3.78 per cent, and was ahead of 4.81 per cent in North America, 3.31 per cent in South America, and just 2.3 per cent in Asia.

Context's Pygott asserts that, for distributors focused on the consumer channel, we may gradually start to see more new PCs running Windows 10 over the next six weeks. But widespread adoption in the commercial sector seems unlikely any time soon.

"In the business space it will take much longer; at the moment the expectation is that it will not happen until next year," she says. "A lot of businesses have already refreshed [in the recent past], owing to the need to migrate from XP."

If Microsoft is looking for an inspiring upturn in fortunes after an inauspicious start, it is probably best not to further examine the sorry tale of Run For Your Wife which, having been reduced to screening at only one UK cinema, raked in just ￡123 in its second - and final - weekend on release. Resellers across Europe will be hoping that Windows 10 does not replicate such a Dyer performance.