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Microsoft Corporation (MSFT) Windows 10 Adoption is Slowing Fast

Microsoft stock

Microsoft Corporation is still trying to ensure that Windows 10, its latest OS, will take over the world. The firm’s last release, Windows 8, alienated users and put hurdles in the way of wide adoption. Windows 10 hasn’t gotten that bad press just yet, but adoption is slowing, and it’s slowing fast.

Microsoft Corporation (MSFT) Surface Book

A news study on the number of PCs running Windows 10 across the world, performed by analytics firm Net Applications, shows that 132M devices across the world are now running Windows 10. That means that about 7.9 percent of PCs are now using the OS, but that’s not enough to solve problems at Microsoft.

Windows 10 slows down

The study showed that Microsoft  sent brought the number of PCs on Windows 10 to about 1.3 percent of the world’s total in October. In September the gain was at 1.4 percent, while in August the firm managed a massive 4.8 percentage point rise in install base.

The 132M number quoted by Net Applications is in line with an official Microsoft count of 110M on October 6.

August’s growth rate wasn’t going to hold steady forever, but the slow down between September and October should be noted. It’s not a wide margin, and it could easily be turned around as we head into Christmas sales, but Microsoft appears to be able to convince fewer and fewer people to grab Windows 10.

With a free upgrade that sort of thing was always likely to happen. Microsoft even installed an ad on the desktop of all updating users around the world to ensure they didn’t miss out on any info about Windows 10.

The firm designed a system where most of the upgrades would come in the first days. The problem, as downloads slow, is that there’s very few direct routes to make money off of Windows 10.

Microsoft worries about Windows 10

With all the optimistic press about Windows 10, and the newest hardware from Microsoft, some of the numbers in the firm’s most recent earnings release may have confused. Surface revenue was down massively year on year in the third quarter, and Windows 10 has brought nothing but falls in revenue to the firm’s accounts.

That may be justified. Microsoft , with its free upgrade to Windows 10, is clearly trying to ensure that users use the OS first. The firm will worry about how many of them buy a new PC with Windows 10 installed, paying a license fee to Microsoft, down the road. That will be most important on the enterprise side, but Microsoft is working on more important projects.

Windows sales are going to bolster Microsoft Corporation  earnings for quite a while, but the firm’s high growth segments, mainly in cloud and enterprise, are what those with shares really care about.

Heather Bellini of Goldman Sachs still thinks that Windows 10 is a good excuse to Sell shares in Microsoft. In a October 23 report on the firm Bellini said that a price target of $45 suits shares, but one of the major problems was a forecast rise in revenue.

Goldman raised its “revenue forecast in the lower margin MPC business, specifically Xbox and Surface.” That segment, which includes the Windows 10 devices that Microsoft itself sells, has a much lower margin, and some on Wall Street think it may hurt Redmond long term.

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