How the PC market has badly hurt Microsoft’s revenue from Windows

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The global PC market has not had a good 2022 and has suffered almost everywhere. According to Gartner, there were a total of 65.3 million PC shipments worldwide in the fourth quarter of 2022. This was a decrease of 28.5% from the fourth quarter of 2021. This is the largest decline in quarterly shipments since Gartner began tracking the PC market in the mid-1990s. says Gartner. 286.2 million PC shipments were shipped in 2022, a decrease of 16.2% from 2021.
IDC shared similar numbers. According to IDC, global shipments of traditional PCs in the fourth quarter of 2022 (4Q22) fell “below expectations” as 67.2 million PCs were shipped, a decrease of 28.1% compared to 2021.
Microsoft announced its quarterly results and the impact of the PC market is evident in the revenue the company generated from Windows. During its quarterly earnings call. Microsoft revealed that his reverie off Windows OEM plummeted 39% in Q2. This is the revenue Microsoft makes when PC manufacturers put Windows on their devices.
Microsoft CEO Satya Nadella said the numbers had returned to pre-pandemic levels. While the number of PCs shipped fell during the quarter and returned to pre-pandemic levels, Windows usage intensity remains higher than pre-pandemic, with an increase of nearly 10 percent of time per PC. Nadella said during the income interview. He also said monthly active Windows devices also hit an all-time high this quarter.

Not many customers want to upgrade

Mikako Kitagawa, Director Analyst at Gartner said: “As many consumers already have relatively new PCs purchased during the pandemic, a lack of affordability trumps any motivation to buy, driving consumer PC demand to its lowest level in years. .” added Kitagawa.
Demand for PCs fell in almost every part of the world. The EMEA region saw a 37.2% decline, according to Gartner, due to the combination of political unrest, inflationary pressures, interest rate hikes and an impending recession. “A drop of this magnitude will only happen when market demand actually comes to a standstill,” said Kitagawa. “Business and consumer confidence across EMEA has collapsed, leading to a massive drop in PC demand. A massive increase in inventory has also severely limited sales opportunities as sellers focus on moving old inventory,” he added.

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