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HP’s Bradley Says Windows 8 Had Slower Than Expected Start

Hewlett-Packard Co. (HPQ) Executive Vice President Todd Bradley said sales of the latest version of Microsoft Corp. (MSFT)’s flagship Windows operating system had a disappointing debut.

As the largest personal-computer maker, Hewlett-Packard has insight into purchases of devices that run Windows 8, which went on sale Oct. 26.

Analysts are already predicting lackluster holiday-season sales for Windows-based machines. Microsoft and its hardware partners are relying on the new operating system, which can also be used on touchscreen devices, to reinvigorate demand for PCs as consumers and businesses spend more time and money on smartphones and tablets.

“It was a slower start than many people expected,” Bradley said in an interview yesterday on Bloomberg Television. “We see continued momentum and continued growth” this month, he said.

Rick Sherlund, an analyst at Nomura Holdings Inc., said last month that the operating system is off to a “rough start.” Windows 8 won’t affect Dell’s results for two quarters because customers aren’t rushing to upgrade to the new system, Dell Chief Financial Officer Brian Gladden said Nov. 15, when the company reported third-quarter results.

U.S. retail sales of PCs running Windows have been weak, with revenue declining 21 percent in the four weeks after the operating system’s release, compared with the same period a year earlier, according to NPD Group Inc. Brent Thill, an analyst at UBS AG, cut his estimate for Microsoft Surface tablet sales in half, to 1 million units in the fiscal second quarter, citing “gloomy sentiment” after the holiday shopping season.

Redmond, Washington-based Microsoft said in November that it has sold 40 million software licenses since Windows 8 became available. Some of that tally includes versions shipped to corporate customers with multiyear contracts, making it difficult to gauge consumer demand.

To contact the reporter on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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