Windows 7 Grows Market Share As XP Declines

Relief for Microsoft as more evidence points to a growing market share for Windows 7, with a corresponding steady decline for its ancient Windows XP operating system.

Microsoft’s Windows 7 ran on nearly 10 percent of PCs during the last day of January, according to statistics-tracking firm Net Applications, reflecting a general adoption trend upwards for the operating system.

Unsurprisingly, Net Applications has indicated that the highest Windows 7 usage in the US is centred on Redmond, Wash., where Microsoft has its headquarters; some 42 percent of Internet users within the city of Redmond itself are currently using Windows 7, which launched on 22 October.

For January 2010, Windows 7 averaged a 7.57 percent market-share.

By comparison, Windows XP held 66.15 percent, Windows Vista held 17.47 percent, Mac OS X 10.5 held 2.37 percent, Mac OS X 10.6 had 1.80 percent, and Linux claimed 1.02 percent.

Net Applications draws its statistics by aggregating data from some 40,000 websites, allowing it to track numbers for PCs, mobile devices, consoles, handhelds and servers.

Market-share for Windows XP has been steadily declining since March 2009, when it held 75.02 percent of the market, while Vista’s market-share continues to rise incrementally from its 16.44 percent share that same March.

Microsoft attributed its most recent quarter’s strong revenues of $19.02 billion (£11.95 billion) to the strong marketplace performance of Windows 7. According to the company, some 60 million licenses for the operating system have so far been sold, with revenues for its Windows & Windows Live Division climbing year-over-year from $4.06 billion (£2.55 billion) to $6.9 billion (£4.3 billion).

Despite the success of Windows 7 filling the company’s coffers, however, some of Microsoft’s other divisions saw their revenues decline during the second fiscal quarter of 2010. Specifically, Microsoft Business Division reported a year-over-year dip from $4.88 billion (£3.06 billion) to $4.74 billion (£3 billion) for the most recent quarter, while its Entertainment and Devices Division saw its numbers tumble from $3.25 billion (£2 billion) to $2.9 billion (£1.8 billion).

During a 28 January conference call, Microsoft CFO Peter Klein indicated that the uptick in revenues was due largely to “strong consumer demand for Windows 7 and PCs.” Despite that, enterprise software sales have remained stagnant.

“Weak business PC sales” lie behind much of that lack of growth, suggested Bill Koefoed, Microsoft’s general manager of Investor Relations, during that 28 January call. Furthermore, he added, “conditions from last quarter remain unchanged” for many businesses keeping their IT budgets tamped down in the wake of a massive global recession.

According to research firm NPD Group, US technology sales through commercial resellers were up 7 percent in December 2009, part of a slow but steady trend upward since September 2009. Those sales numbers for December “were the first monthly revenue increase since the summer of 2008,” according to a press release issued by the firm, “illustrating how closely business demand for IT mirrored the downturn in the economy.”

If that trend continues into 2010, it may help impel a tech refresh that could lift sales for both hardware and software. This would obviously benefit a number of companies, including Microsoft, whose executives have repeatedly connected any resurgence in the company’s bottom line to an accompanying renewal in hardware sales for the tech industry as a whole.