Hewlett-Packard managed to generate press this week with news of an operating system throwback it hopes will spur otherwise lackluster PC sales. In an online promotion, the tech giant is offering discounts on consumer PC models that come with Windows 7 installed, as opposed to the current version of the Windows operating system, which is 8.1. But some industry watchers wonder how it will impact an already strained HP-Microsoft relationship.
Just to be clear, HP does still sell Windows 8.1 PCs, but is apparently hoping to increase overall PC sales by actively promoting a Windows 7 option.
Windows 7 PCs are “Back by popular demand,” says the marketing line on the front page of HP.com. The company is offering $150 off PCs that shun Windows 8 for the more popular Windows 7 operating system.
Five discounted models are available -- three desktops and two notebooks. The HP Pavilion 500-205t desktop is selling for $479.99; the Pavilion 15t-n200 notebook runs $599.99; the Envy 700-215xt desktop goes for $699.99; the Envy 15t-j100 sells for $779.99; and the Envy Phoenix 810;135qe runs $999.99.
Testing the Waters?
So, what’s HP up to? Just selling PCs, it seems, and trying to increase sales.
The company has posted declines in PC shipments for seven quarters in a row. By bringing back custom Windows 7 PCs and notebooks, HP is running a publicity stunt that could turn heads by leveraging the more popular version of Microsoft's flagship software.
Microsoft still supports Windows 7 and there’s no indication that it’s nearing the end its lifecycle, unlike Windows XP. HP may be testing the waters for the thousands of diehards who cringe at the thought of upgrading to Windows 8.1 when Microsoft stops supporting XP this April.
We caught up with Rob Enderle, principal analyst at The Enderle Group, to get his take on the promotion. He told us many people don’t like change -- and that holds true with operating systems. The problem, he said, is that Microsoft has moved on and it is the operating system owner.
Promotion Could Backfire
With this promotion, he explained, customers are buying a current generation machine with an operating system that’s two years out of date. The fact is, before to long, users will need to upgrade.
“What you are betting is the path from Windows 7 to Windows 9 [when 9 comes out] is going to be clean. Given how many people are on Windows 7, that’s probably not a bad gamble,” Enderle said. “For those consumers who really don’t like Windows 8 and are willing to gamble that the jump to Windows 9 will be better -- and that’s not a bad bet -- these machines [from HP with Windows 7] provide a very differentiated opportunity.”
But the promotion could backfire if it increases the tension between HP and Microsoft -- and that tension is already pronounced, Enderle said. With PC sales declining and a large market that isn’t keen on Windows 8, though, HP seems willing to take the risk.
“The end result is the promotion should shift a certain amount of business to HP that they wouldn’t otherwise get," Enderle said, referring to buyers who need a new PC, but don't want to bother with Windows 8.1.
"So economically, it may play out," Enderle said, by increasing PC sales for HP in an otherwise down market.
"Strategically, we’ll see how the whole Microsoft-HP relationship holds up. This is the kind of thing that got Microsoft to start doing its own hardware and might get them to accelerate that effort,” Enderle said.
“Long-term, this move may become problematic for HP. They may find that the relationship with Microsoft is unrecoverable, but near-term, it provides a decent opportunity for those customers who don’t like Windows 8." And, the fact is, "A lot of people don’t like Windows 8."
Waiting for Windows 9
At the same time, it's important to realize that Microsoft understands that Windows 8 has not been well received. Recently rumored efforts to speed Windows 9 to market indicate recognition of the problem.
The more pressing questions are whether other PC makers will follow suit with promoting their own Windows 7 computers until version 9 is released, and also, how quickly Microsoft will be able to produce a clean version of Windows 9. After the widespread criticism that Windows 8 has received, Microsoft needs to be sure to hit one out of the park with its next new system.