More on the effects of netbooks

Paul Thurrott has written a Windows-focused blog, called Supersite for Windows, for years, and is generally a fan of the platform. He has just published an essay that highlights the huge damage caused by the explosion of netbook Windows machines over the past couple of years. By damage, I mean that the sale of cheap netbooks effectively caused purchasers to discount the value of the Windows platform, thereby causing a huge problem for both Microsoft and the hardware manufacturers who drove the market down and down. It is worth a full read.

And here is an excerpt:

Windows 7 was a lie.

See, that 20 million [sales of Windows 7 per month] figure—which I believe to have been massaged from a bookkeeping standpoint—was unfairly bolstered by sales of low-cost PCs, primarily netbooks. And that’s the clue we see in the NPD statement above. It says that the average selling price of notebooks [this past holiday season] “rose only $2 to $420.” The average selling price of Windows-based PC notebooks is barely above $400. Do you know what the ASP is for Apple’s Macbook line? It’s $1419. A full $1000 more than that of a typical Windows notebook. $1000!

It’s not pat to say that the Windows PC market went for volume over quality, because it did: Many of those 20 million Windows 7 licenses each month—too many, I think—went to machines that are basically throwaway, plastic crap. Netbooks didn’t just rejuvenate the market just as Windows 7 appeared, they also destroyed it from within: Now consumers expect to pay next to nothing for a Windows PC. Most of them simply refuse to pay for more expensive Windows PCs.

And this isn’t my opinion, it’s a fact. Despite being created as a “touch-first” OS, only 4.5 percent of Windows 8 PC sales including multi-touch capabilities. When you couple this with the fact that statistically zero percent of PCs that were upgraded to Windows 8 included touch capabilities, you can see that even in the tiny current market of Windows 8 users, virtually no one is using multi-touch.

(Before anyone else points this out, yes, the NPD’s data cited here does not include tablets, like Surface, nor does it measure sales at Microsoft’s own retail stores, which accounted for virtually all Surface sales in Q4. But let’s not pretend that Surface sales have taken off. Based on Microsoft’s silence, and what we do know about Windows 8 sales, it’s likely that Surface accounts for a tiny, tiny percentage of Windows 8 sales overall.)

In a privately distributed report, NPD concludes that “netbooks did an incalculable amount of damage to the PC market,” driving average selling prices down at an unsustainable rate.