HP pushing Win7 ahead of Win 8: Strategic Rationale or Tactical Move?

“Back by popular demand” is what industry watchers have quipped, based on reported moves that HP plans to offer PCs with Windows 7 on one of its global online stores. For obvious reasons, this has raised more than an eyebrow. However, a quick glance on the SKUs offered online in India tells a different story. HP’s India online store offers 86% notebook PCs based on Windows 8 versus a mere 2% on Windows 7 Professional, and 73% of its desktop PCs with Windows 8 versus 5% on Windows 7 Professional. Flipkart offers 60% of HP notebooks with Win 8 (all flavours) vis-à-vis 12% on Windows 7. Agreed, the online retail of PCs in India still trails sales through physical stores by some distance, but it does list the popular choices.

Does it really make sense for HP to turn back the clock on the Windows OS for PCs? May be ‘Yes’ in the short run, but the cost of that decision could be high on a longer time horizon. The global PC market is reeling under tremendous pressure, and it helps to pass on every bit of incentive to customers and other stakeholders (channel partners, SIs et al).

The Cost Factor

Windows 7, a stable operating system, provides an optimum experience on hardware with lower specifications in terms of a non-touch screen PC or a non multi-touch pad. This definitely translates into a lower burden for end customers.

Windows 8 on the other hand has not been very popular, the UI being completely different from its predecessors. The support required for a Win 8 PC customer could cost higher to an OEM, which may dent the already razor-thin margin.

The Mental Block

Customers used to the simplicity of earlier Windows versions are finding it difficult to embrace Windows 8, and this is not helping the already weak PC market.

Is all this pain really worth the trouble?

Yes, the PC has to evolve from its current state, if it has to compete with the tablet. The pull of “touch” and “mobility” has reached proportions which cannot be ignored any further.  The success of the PC and the convergence of these two form factors would largely hinge on an operating system optimised to “touch” and “tablet”.

An OS, like Windows 8, augments Microsoft’s efforts to provide a seamless experience to its PC users as they juggle around with mobile devices like the tablet and the smartphone. The ultimate goal would be to monetise the “Windows Store”. And finally, PC vendors like HP who also carry tablets in their inventory are likely to stand a better chance with Windows in the commercial segment.

As the debate about different versions of the Windows OS and competing form factors continue to converge, a plethora of combinations have started unfolding from PC vendors’ stables, including Chromebooks based on Google’s Chrome OS. The market is likely to remain in a state of flux for some time and will witness a variety of platforms (Intel and non-Intel) and OS (Windows and Android). Finally, the ‘less than inspiring’ performance of Windows 8 may well prompt Microsoft to expedite the launch of Windows 9.

Thus, HP (and other OEMs) can actually continue to sell devices with Windows 7 till October 2014 or till such time as the PC market shows definite signs of recovery. So, creating a marketing blitz around Windows 7 will help liquidate existing stocks, or at least provide some much needed momentum to PC sales in a tough year. In that sense, if HP does actively promote sales of Windows 7 based PCs, it’s not a bad tactical move, after all!

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