In other news, Moore's Law continues not being a thing, and PC sales continue to decline as a result.

That's according to analyst firm IDC, as reported by The Reg:

Desktop PC shipments dipped below 100 million in 2017 and there's worse to come across the personal computing device market according to analyst firm IDC.

The company on Wednesday published a summary of its Worldwide Quarterly Personal Computing Device Tracker for 2017's final quarter in which it totted up shipments for the year across all forms of PC and slate-style tablets.

The headline figure was a 2.7 per cent year-over-year decline.

The firm said "commercial PC renewal momentum remained as the main catalyst in a market that was also tempered by lackluster demand for legacy form factor devices and component shortages." There was a little good news in 2017 with growth in notebook sales, as they grew more strongly than in any year since 2012, but the overall picture was poor.

Their article includes a handy table showing the expected decline for each product category, but even with notebooks and detachable tablets expected to grow modestly, overall PC sales are expected to drop 1.80% in the next five years. And that's not the only bad news:

News of continuing slow-downs in PC and tablet sales come on top of the first-ever drop in smartphone sales.

People just don't see value in upgrades these days, and who can blame them? Devices are now almost devoid of moving parts that break and have been water-and-dust-proofed to keep their innards clean. CPU upgrades offer less obvious advantages for common workloads or tasks.

Worldwide smartphone shipments dropped by 5.6%, which is their first-ever drop, according to different analyst group Gartner:

Several major factors caused the market shrinkage, said Anshul Gupta, research director at Gartner. “First, upgrades from feature phones to smartphones have slowed right down due to a lack of quality ‘ultra-low-cost’ smartphones and users preferring to buy quality feature phones.

“Second, replacement smartphone users are choosing quality models and keeping them longer, lengthening the replacement cycle of smartphones. Moreover, while demand for high quality, 4G connectivity and better camera features remained strong, high expectations and few incremental benefits during replacement weakened smartphone sales,” Gupta added.

That's what the end of Moore's Law looks like, folks. With sales of both PCs and smartphones now declining because new devices just aren't that much better than the old ones, and VR sales still stubbornly not increasing to take up the slack, makers of consumer electronics could be looking at some lean years over the next five.

Windows 10 will now require up-to-date hardware

Just in case you thought Microsoft's "Clover Trail" Atom debacle was some kind of aberration, Microsoft have now made it official: if they don't feel your hardware, you won't get any more Windows 10 updates. Period.

From Gordon Kelly at Forbes:

Right now Windows 10 is undergoing a massive upgrade to the so-called ‘Creators Update’. But suddenly Microsoft has confirmed millions of Windows 10 users will never get it…

Speaking to PC World, Microsoft said that despite pledging Windows 10 feature updates until October 13th 2020, this will now depend on users running relatively modern hardware. In short: if a manufacturer stops supporting your hardware at any point then Microsoft may not longer upgrade your version of Windows 10.

“Recognizing that a combination of hardware, driver and firmware support is required to have a good Windows 10 experience, we updated our support lifecycle policy to align with the hardware support period for a given device,” Microsoft said in a statement.

“If a hardware partner stops supporting a given device or one of its key components and stops providing driver updates, firmware updates, or fixes, it may mean that device will not be able to properly run a future Windows 10 feature update.”

And the result of a device or component no longer being supported is severe. When updating users will simply receive the message: “Windows 10 is no longer supported on this PC”.

And to make matters worse, at present Windows 10 will not tell users which piece of hardware is responsible for the cancellation. A user will have to check every part of their PC, from the processor and RAM to the hard drive, graphics and network card.

This brutal (and frankly over generalised) decision follows in the wake of Microsoft blocking Windows 10 Creators Update upgrades for computers using older Intel Atom ‘Clover Trail’ processors without warning or explanation. Conversely it also said new Intel Kaby Lake and AMD Ryzen silicon will also be made incompatible with older versions of Windows to force them onto Windows 10.

Brutal snobbery: confirmed.

Once again, Darth Microsoft is altering the deal, making Windows 10 look like an ever-less-attractive option for organizations (and individuals) who may not want to be forced to upgrade all of their hardware in order to switch to an operating system that they're not what wild about, to start with. Still, even with the banality-of-evil tone of this new announcement, something feels slightly different about this latest broken promise by the Redmond crew. Given how horrible the optics of this are, and how self-destructive this move should be to Microsoft's attempts to woo enterprise customers over to Windows 10, I have to think that this is almost entirely a cost-cutting measure.

After laying off unknown thousands of their staff, Microsoft are clearly not done cutting costs in their stagnant Windows 10 operations, as they shift focus to the Azure and other cloud services. Supporting the entire range of Windows-capable hardware wasn't luring users over to the new OS, so it makes a brutal sort of sense to stop doing that, awful PR be damned. It's possible that this was always the plan, that Microsoft never planned to continue supporting older hardware in spite of promising to do so, but it doesn't feel like that to me; it feels like Microsoft's ongoing failure to lure customers to Windows 10 is starting to stress their organization and operations, more broadly. The cracks have been slow to show, but this might be the cracks starting to show, no matter what their share price is doing on any given day.

When the thing that happens is the opposite of what you predict.

Failure is pretty common for people trying to predict the future, but even by the standards of most futurists, this is something of a high water mark (or low point, depending on your perspective) in forecasting for the technology industry.

It was just a week ago that Gartner, Inc., a technology research firm that, among other things, advises companies about the whens and hows of transitioning to new operating systems, was talking about how the PC sales decline was slowing. PC sales, according to Gartner, would only decline by 0.3% in 2017, mainly because everybody was transitioning from Windows 7 and 8.1 to Windows 10. I was, naturally, skeptical, and it looks like I was right about that, because Gartner themselves are now saying that PC shipments are at their lowest levels since 2007.

From CNBC:

Gartner said this week that the PC market declined 4.3 percent during the second quarter. The research company said that shipments were at the "lowest quarter volume since 2007," noting the market dropped for the 11th quarter in a row.

The report is in stark contrast to another from IDC in April which said that the PC market grew for the first time in five years.

Gartner's most recent report isn't just a stark contrast to IDC's April report; it's a stark contrast to their own report of a week ago, which predicted a decline in PC sales for this year of only 0.3%. According to Garner's own numbers, PC sales have already declined by 4.3%, which is 4.0% more than they themselves were forecasting, and the year's only half over. Gee, I wonder if their own vested material interests in seeing big companies upgrading their PCs had any bearing on Gartner's forecasts?

The news is worse for some PC makers, too; Apple's sales are down 9.6% compared to last year, at least if Gartner's most recent figures are to be believed. It should be said that I have serious suspicions about the quality of work that Gartner are doing here, and whether their process is impartial in any sense at all, although Apple was late in refreshing its product lineup, so it's possible that the 9.6% is in the right ballpark. Still, there's no doubt that PC sales are still in a steep decline, and the unicorn of Windows 10's imminent widespread adoption at the enterprise level, which has consistently failed to materialize, with only one PC maker seeing any growth at all.

Of note: Dell seems to be the only company finding growth in the PC business. "Dell achieved five consecutive quarters of year-on-year global shipment growth, as shipments increased 1.4 percent in 2Q17," Gartner said. "Dell has put a high priority on PCs as a strategic business. Among the top three vendors, Dell is the only vendor which can supply the integrated IT needs to businesses under the Dell Technologies umbrella of companies."

So, Dell is doing better than most, although it should be noted that year-over-year growth of only 1.4% is far from fantastic (there's a reason why Dell went private, after all) - Dell's current rate of growth is only noteworthy because it is growth, in an industry that's been declining for years.

This is what the end of Moore's Law looks like. I've said it before, and I'll say it again: if you last bought a PC during the Obama administration, and you're still happy with how it's performing, then there's no need to upgrade. Today's newest chipsets are slightly better than those of eight years ago, but the difference is only a slight one; at the height of Moore's Law, the number of transistors on our CPUs would have doubled four times in a decade, but as the rate of PC processing power continues to plateau, there's just no reason to upgrade unless your old PC has packed it in. And people seem to have figured that out, whether they're individual consumers or CIOs.

PC gaming marches onward

In case you were wondering why Microsoft is suddenly keen on PC gaming, after having basically neglected is for years in favour of their XBox console line, the latest gaming PC sales numbers might hold a clue. Because sales of gaming PCs are booming, even as PC sales overall continue their years-long decline.

From TechSpot:

We often hear about the declining PC market, but it seems that gaming PCs are on the rise in North America. According to the vice president of computer and electronics store Micro Center, overall sales increased 25 – 30 percent on year in 2016, and Micro Center's own sales grew 200 – 300 percent from a year ago.

Digitimes reports that VP Kevin Jones believes the increase in gaming PC sales can be attributed to the growth in eSports popularity. He considered PC gaming a niche market as recently as five years ago, but says the segment has grown rapidly since 2016 thanks to mid-range prices and more publicity around eSports.

[...]

Last year, analyst firm Gartner reported that Q1 2016 was the first quarter to see fewer than 65 million PC sales since 2007. It is, however, a different story when it comes to high-end gaming laptops and desktops, which it expects to grow from 6 million units in 2015 to 8.7 million units in 2020, accounting for 13 percent of all consumer PC shipments.

It would seem that the PC gaming renaissance is far from over, and gaming PC sales are booming in spite of Moore's Law not being a thing anymore, which may be contributing to Windows 10's popularity among Steam users, since new PCs now come with Windows 10 installed by default. It also helps that digital download accounts for 69% of all game sales, which boosts PC gaming in particular, since PC gamers were basically pushed into the arms of Valve and Steam by apathetic brick-and-mortar retailers years ago.

Yes, sir, if you're a PC gamer, it's a great time to be gaming. If you're a console gamer, you may want to consider joining the...



(Truly, we live in dank times.)

One interesting sidebar: with gaming PC sales booming, and boosting Windows 10's market share in the process, and Chromebooks sales also booming, but eating into Windows 10 PC sales, the shape of the future overall PC market could be about to evolve in some pretty interesting ways. Which PC sales trend has greater staying power? Which will reign supreme? Whichever it is, the next year in PC should be very interesting.

Chromebook shipments surge, cutting into Windows 10 PC sales

When Microsoft announced Windows 10 S earlier in the week, their obvious "Chromebook killer" that was locked to Edge and Bing as unchangeable defaults, and laden with even stronger software-installation restrictions (Windows Store only!), Google didn't seem to be worried about it. Given the way sales are trending in their favour, that attitude would seem to be entirely justified.

From ARN from IDG:

In a slowing PC market, Chromebooks siphoned market share away from Windows PCs in 2016 as their popularity grew outside the education market.

Chromebook shipments grew by a stunning 38 percent in 2016 compared to 2015. Gartner estimated 9.4 million Chromebooks shipped, compared to 6.8 million units in 2015.

The number is just a fraction of overall PC shipments, but growth came in an otherwise down PC market. Overall PC shipments in 2016 were about 270 million units, a decline of about 6.2 percent, according to Gartner.

Looking forward, 2016 may go down as the best year ever for Chromebook shipment growth. Gartner is estimating shipments to continue growing in the coming years but at a slower pace.

[...] Analyst firm IDC has also predicted Chromebook shipments will grow by double-digit percentages in coming years. Most of the Chromebooks are shipping to classrooms in the U.S., Nordic countries, Australia and New Zealand.

There is also growing interest in Chromebooks from businesses in the finance and retail sectors. Companies are using Chromebooks as no-frills mobile thin clients, considering they are cheap to deploy and easy to manage, said Mikako Kitagawa, an analyst at Gartner.

Yes, Microsoft would definitely like a piece of this segment of the market; whether the Surface Laptop, with its hobbled OS, is good enough to make that happen for them, is anyone's guess. 

PC sales have been declining for years, a situation which was only exacerbated by Microsoft's high-profile Windows 10 giveaway (a giveaway which isn't actually over yet, although its profile is certainly lower), so the fact that Chromebook sales are up by 38% is more than merely significant. This looks like a huge shift from from Windows PCs and towards any viable alternative; one has to wonder if Apple could be reaping more reward from this same shift if they weren't so busy dropping the ball with their own laptop line.

It remains to be seen whether consumers will be willing to accept Microsoft's anti-consumer Win10 S bullshit in ordet to get cheaper laptops. The fact that Microsoft has already backed off the $49 fee to upgrade from Win10 S to Win10 Pro, at least for the rest of this year, speaks volumes about Microsoft's own confidence about that happening. 

What we are seeing already, though, is that consumers really aren't waiting for Microsoft to get their heads out of their asses; they're looking for alternatives, and anyone who has their shit together can probably make a lot of hay out of Microsoft's disarray. Makers of Linux laptops should take note; if they're wanting to be one of those alternatives, it's probably now or never.

Is this LTSB carve-out by Microsoft meant to boost sales of CPUs?

A few months ago, the news broke that AMD's and Intel's new chips (Ryzen and Kaby Lake, respectively) would only officially support Windows 10. The move was clearly the product of some sort of side-dealing with Microsoft; with Windows 7 still nearly twice as popular as Microsoft's newest OS, limiting support in this way effectively undercuts sales of newer-model CPUs, something which wouldn't be in AMD's or Intel's interests at all unless Microsoft had made some other concession elsewhere.

Well, we may have just found out what that concession was.

From Gregg Keizer at Computerworld:

Microsoft has largely invalidated one of Windows 10's signature concessions to corporate customers, said Gartner analysts who recommended that enterprises reconsider running the operating system's most stable and static edition.

"Microsoft has clarified support plans for LTSB, highlighting restrictions and caveats that could make this an unviable strategy," wrote Stephen Kleynhans and Michael Silver in a Gartner research note to clients earlier this month.

[...]

The most far-reaching change was quietly revealed as the 22nd item in a long FAQ on Windows support. "Windows 10 Long Term Servicing Branches, also known as LTSBs, will support the currently released silicon at the time of release of the LTSB," the new policy stated [emphasis added]. "As future silicon generations are released, support will be created through future Windows 10 LTSB releases that customers can deploy for those systems."

The tying of support to the latest silicon -- to the current generation of processors and associated chipsets from the likes of Intel and AMD -- was broadly communicated by Microsoft in January 2016, and revised in March. However, most of the attention paid to the unprecedented change was about how it affected those running Windows 7 or Windows 8.1 on newer PCs. Even though Microsoft also said at the time that "all future silicon releases will require the latest release of Windows 10," there was no clear call-out that the same rule applied to LTSB.

But it did, and does. And there's the rub.

To me, this stinks of quid pro quo. Microsoft clearly wanted AMD and Intel to limit support for new CPUs to Windows 10, thus pushing the market in a Win10 direction to which it clearly wasn't inclined to move naturally; AMD and Intel clearly wanted to be compensated for passing on 48% of the PC market by doing so. And thus, we have this change to the Long-Term Service Branch of Windows, which only existed in the first place "because of corporate customer resistance to the accelerated tempo of added features, changed code and altered UI in Windows 10."

The other effect of this side-deal between AMD, Intel, and Microsoft, is to undercut the appeal of Windows 10 to Enterprise customers. The allure of LTSB was that Enterprise customers' IT departments wouldn't have to spent nearly as much time dealing with upgrades as Microsoft phased out earlier Windows 10 versions in favour of newer ones. That's not the case, anymore:

"Many I&O [Infrastructure & Operations] leaders expected to pick a single LTSB release that they would deploy and run for up to 10 years on all their organizations' PCs, old and new," Kleynhans and Silver said in their report.

"With Microsoft's latest guidance on LTSB, this is not possible."The problem, they explained, is that in the face of essentially annual silicon upgrades by Intel, enterprises would have to ditch the idea of sticking with a single LTSB build for, say, five years. Instead, they could be required to adopt virtually every LTSB version as they buy new PCs powered by new generations of silicon.

It seems to me that this carve-out side-deal undercuts both Windows 10 Enterprise adoption, and the sales of new PCs. Why switch to Windows 10 now when it means more upgrading going forward; why not just stay with what you're already using for another couple of years? Also, why buy new PCs, if your existing software won't be fully supported on them; why not just stick with the hardware you're already using, which is probably still perfectly fine?

Coming at a time when new PC sales have been in decline for years, making new PCs look even less attractive because of the extra Win10 IT support costs that will come with them seems counter-intuitive, to put it mildly. For organizations that use a large number of PCs of varying ages, the fact that Windows 10 now requires frequent hardware and software updates (because otherwise you'll have multiple different Windows 10 versions running on the same corporate network) would seem to create something of a barrier to entry.

If this was the price for AMD and Intel to preferentially support Windows 10 over the (much more popular) Windows 7, as I suspect, then it looks to have been both short-sighted and self-defeating, meaning fewer sales of new PCs and slower adoption of Windows 10. It's as if some MS executive had "get AMD & Intel on-board" as one of their key results, and didn't really care what the consequences were of doing the deal that made it happen.

I suppose it isn't particularly surprising that Microsoft appears to have basically bribed both AMD and Intel into tying all of their new product releases to one specific version of Windows. I'm just surprised that AMD and Intel sold out so cheaply; it seems like they're giving up far more than they're getting back.

This is what the end of Moore's Law looks like, part 2

When this year's devices just aren't that much more powerful than last year's devices, or the year's before that, or the year's before that... well, there's just less incentive to replace them, isn't there? That's what we're now seeing in sales figures of devices across the board, and according to some analysts, it's not likely to change much, anytime soon.

From Computerworld:

According to Gartner, which provided Computerworld with its latest device shipment forecast broken out by operating system, in 2016 Windows powered about 260 million devices of the 2.3 billion shipped during the year. Windows accounted for approximately 11.2% of the total devices, which overwhelmingly ran Google's Android.

Meanwhile, iOS and macOS -- the latter was formerly dubbed OS X -- sank to 248 million devices in 2016, a 10% drop from the year prior. The cause: Slackened sales of the iPhone, Apple's dominant device and biggest money maker.

[...]

Gartner's forecast was another gloomy report on almost every device category, with shipments flat this year compared to last and growth not projected until 2018.

"The global devices market is stagnating," said Gartner analyst Ranjit Atwal in a statement Wednesday. Mobile phone shipments are growing only in emerging markets in the Asia and Pacific markets, Atwal added, and noted that, "The PC market is just reaching the bottom of its decline."

The PC industry's troubles have affected Microsoft most of all; Windows is almost entirely dependent on PC shipments, which have been stuck in a protracted slump. Future shipments were further hit when Microsoft walked away from the smartphone business last year.

[...]

PCs will not disappear -- something some pundits fretted about as the sales and shipment downturn extended past earlier records -- but the business has been hard hit: In 2012, for instance, more than 350 million PC-like devices shipped globally.

Gartner is still betting that a PC replacement cycle will boost shipments, even if only slightly. But this week's forecast -- unlike the one in October -- predicted a delayed growth. In October, Gartner had said the PC business would claw its way back into the black in 2017; this month's prognosis is that growth won't occur until 2018.

Now, predictions like this should always be taken with a few grains of salt, and the fact that this prediction amounts to, "not this year, but maybe next year," along with predicting that iOS + MacOS sales numbers will recover and surpass Windows' (but without going into details as to why that should happen, now that consumers have apparently soured on Apple's product line) are both problems. Gartner's also pegged the Enterprise shift to Windows 10, and thus new devices, to 2018... again, without explaining why the trend should start then, and not closer to 2020, when cost-conscious companies can continue to operate just fine for another couple of years using the hardware and software that they've already paid for.

The shift of market share from traditional leaders like Apple and Microsoft to Google and Android is somewhat interesting. The fact that Apple is aggressively dumping features that people use all the time (like standard USB ports and headphone jacks) from their devices is probably not helping the Cupertino crowd, and Microsoft's attempt to push their customers into the cloud may actually be helping Android. Google, after all, has lived in the cloud for a long time, and unlike Microsoft can continue to provide those cloud-based computing services for free (supported by ads, natch, but then Google's always been ad-supported).

Overall, though, we appear to be seeing a continuation of trends that have been evident in device sales numbers for a while now. Apart from PC gamers, early adopters, and other enthusiasts, it seems that everyone is pretty happy with the performance of the devices they already own, only replacing those devices as they wear out... and mostly replacing them with cheaper Android devices, rather than more expensive iOS/MacOS or Windows products. None of the new hardware's "features" are things people really want or need, nor are they particularly impressive as technological achievements in and of themselves. Moore's Law alone simply can't drive the high-tech hardware industry anymore.

Which leaves us with the real question: Now that Moore's Law isn't the driving force behind the hardware business, what happens to the the computer makers and consumer electronics companies who have, for decades, been relying on that rapid pace of development to drive sales? Everything we're seeing, from 3D and 4K TVs, to VR and the Internet of Things, fairly screams of the creeping desperation that these companies must be starting to feel as ongoing decline turns into an inevitable plateau.

3D TVs did not become a thing, and while 4K TVs might be out-selling older-model HD TVs lately, they're still not selling nearly as well as HD TVs used to; absent another legislative push from the U.S. Congress, it doesn't look like market forces alone will make 4K into the new standard for TV broadcasts, either. VR still lacks a value proposition which would make it appealing to consumers, as does the Internet of Things -- it's easy to see how companies flogging the hardware would benefit from its widespread adoption, but there's very little advantage on display for the average consumer. And, if this year's tepid coverage of CES's offerings is any kind of guide, it would seem that hype alone isn't enough anymore to sell consumers expensive new tech hardware that they don't actually need, and which isn't actually outperforming the hardware that they already own.

PC industry is now 2 years into its longest sales decline in history

From The Verge:

The state of the PC industry is not looking great. According to analyst firm Gartner, worldwide PC shipments fell 5.7 percent in the third quarter of 2016 to 68.9 million units. That marks the "the eighth consecutive quarter of PC shipment decline, the longest duration of decline in the history of the PC industry," Gartner writes in a press release issued today. The firm cites poor back-to-school sales and lowered demand in emerging markets. But the larger issue, as it has been for quite some time, is more existential than that.

"The PC is not a high priority device for the majority of consumers, so they do not feel the need to upgrade their PCs as often as they used to," writes Gartner analyst Mikako Kitagawa. "Some may never decide to upgrade to a PC again." The threat, of course, comes from smartphones, which have more aggressive upgrade cycles than PCs and have over time grown powerful enough to compete with desktop and laptop computers at performing less intensive tasks. Tablets too have become more capable, with Apple pushing its iPad Pro line as a viable laptop replacement.

Declining PC sales are not news -- I'd blogged about this back in June, and again in July -- but it appears that the trends that we were seeing months ago are continuing to trend, rather than reversing. CPUs just aren't increasing in power at the same rate that they used to, and the widespread adoption of mobile devices (which have less processing power and storage space than a desktop or or laptop rig) has inspired software developers to learn all over again how to write efficient code. Even Oculus has figured out a way to reduce the Rift's required PC specs from $1500 systems to $600 systems.

Added to that, nearly a quarter of Windows users just upgraded their operating systems, something which used to entail buying a new PC; the rest won't need a new OS, or a new PC, for years. Hell, I'm a PC gamer, part of a group that has spent years in a continuous upgrade cycle, and I'm not planning to replace my 3-year-old PC for another 3 years. I'm upgrading the graphics card to something that's Vulkan-ready, but beyond that, I just don't need any more PC; my current rig is still doing everything I need it to just fine, and that doesn't look like it's going to change any time soon.

Previous industry projections didn't show PC sales increasing again until 2018, at the earliest, and even smartphone and tablet sales are levelling off now that everyone owns a phone that's "good enough." Since the projected billions in VR sales aren't going to emerge, either, any more than 3DTV sales did, I expect consumer electronics companies will have a tough time continuing to grow revenue year-over-year, not just this year but for years to come. I'm not expecting 4K TVs to make up their shortfalls, either. 

It's probably only matter of time before PC makers start laying off employees to cut costs and convince shareholders of their determination to return to profitability, but their problem isn't inefficiency, or a lack of productivity in their worforce; their problem is market forces which are largely beyond their control. I have a feeling that we're about to see a culling of the weak in consumer electronics and PC manufacture; the question isn't if any of these giants will fall, but how many of them fall, and how long it takes them to do so.

Windows 10 lost market share to Windows 7 in September

I was expecting Windows 10's update problems and privacy issues to have an impact on its market share. With adoption by home users slowing after the end of Microsoft's free "upgrade" offer, and with adoption by business of Pro and Enterprise versions also reported to be lacklustre, I was expecting Win10 to gain basically nothing in terms of market share; maybe there would be a slight uptick for Win10 as the market shares of Win8 and XP continue to decline, but I expected that Win7 would continue to be #1, with a market share number that was basically unchanged from August.

Well, NetMarketShare's latest desktop OS market share numbers are now posted, and Win8 and WinXP both showed the expected slight downticks, while Win7 remained the #1 desktop OS, but that's the end of the list of my met expectations. Because Win10's market share actually ticked down in September, from 22.99% to 22.53%, while Win7's share rose from 47.25% to 48.27%. Linux also gained a bit, rising from 2.11% to 2.23%.

For the record, this was August: 

And this is September: 

BetaNews' reaction to this was... priceless, really:

WTF? Windows 10 now actually losing market share

By Wayne Williams

It was expected, that once Windows 10 stopped being free, upgrades would slow significantly. That turned out not to be the case last month when NetMarketShare’s usage figures showed it, rather surprisingly, to be business as usual. Growth in August was no different from growth in previous months, although I speculated it might have been buoyed by sales of new back to school PCs.

In September though, according to NetMarketShare, Windows 10 didn’t just show slower growth, it actually went into reverse gear and lost usage share. Yes, you read that right.

According to the figures, Windows 10 went from 22.99 percent globally, to 22.53 percent, a drop of 0.46 percentage points. It’s important to remember that NetMarketShare measures usage (people actually using the operating system, rather than having it installed), and that isn’t a precise science. Even so, Windows 10 losing share is a big surprise. When Windows 8.x did it two years ago, it came after months of dwindling growth. Here, NetMarketShare is showing us a healthy growing operating system coming to a dramatic and sudden stop, and then actually rolling backwards a bit. Are the figures to be believed?

Well, while it wouldn’t be the first time that NetMarketShare has released usage numbers and then revised them a few days later, rival usage share monitoring firm StatCounter has similar findings.

Remember earlier this week, when Microsoft announced that Windows 10 was now running installed on over 400 million devices, a claim which I described as lying with statistics? There's a reason why I reacted that way.

How to lie with statistics, the Microsoft way: August edition

A couple of days ago, I spotted this headline:

Windows 10 has over 50 percent market share, according to Microsoft -- wait, what?

leading to this story, on betanews:

NetMarketShare’s desktop operating system usage figures are due out in a couple of days, and what happens in terms of Windows 10 growth will be interesting as it will be the first time the new OS isn’t available for free.

Before those figures arrive however, Microsoft has released some of its own, and according to the software giant Windows 10 now has 50 percent of the market in the US, and 51 percent in the UK. And, as if that wasn’t surprising enough, those numbers are from June, so the current percentage will likely be much, much higher.

and immediately suspected that it was horse shit. Which was also my reaction on seeing this story, from Softpedia:

Windows 7 Drops Below 40 Percent Market Share for the First Time

Windows 10’s growth continues, eating from Windows 7’s share

Microsoft hasn’t provided us with updated figures on Windows 10 adoption, but a new set of market share figures from StatCounter show that Redmond’s new operating system continued its growth in August, and what’s more, it substantially impacted Windows 7’s market share.

Yes, that's not just one, but two different tech writers, both of them claiming that Windows 10 has gained market share at Windows 7's expense, in both cases without having seen any actual evidence of this. This is how hype happens.

Well, today is the first day of a new month, which means that NetMarketShare will have released new numbers on what's actually happening in desktop OS market share. Let's take a look, shall we?

To recap, this was June: 

This was July: 

And this is August: 

What do the numbers actually show? Let's let Sean Chan at MSPowerUser break it down for us:

The latest report is pretty similar to the recent reports, which shows growth for Windows 10. Last month, we reported that Windows 10 had a market share of 21.13% in 1 year. Now, according to NetMarketShare, the OS now claims 22.99% of the market, gaining 1.86% of the market in just a month. Windows 10 is still the second most used desktop operating system, and that’s not surprising to see as a lot of users are still running Windows 7. In fact, Windows 7 also gained a tiny of market share in August — 0.24% to be exact.

On the other hand, some people are finally moving away from Windows XP — the OS now claims 9.36% of the market, which is still quite a lot. However, the OS claimed 10.34% of market share back in July which means it lost 0.98% of market share in August. For an OS that’s 15 years old, 9.36% market share is still pretty impressive and scary at the same time since Microsoft is no longer providing support for the OS.

As for some of the other operating system, not much has changed over the last month. For example, OS X 10.11 still claims 4.38% of the market (down from 4.69%), Linux claims 2.11% (down from 2.33%) and Windows 8.1 claims 7.92% of the market (up from 7.8%).

So, yes, Windows 10 is gaining users... but slowly. No, Windows 10 does not have 50% of the OS market, or even 50% of the Windows market. No, Windows 10 is still not making gains at Windows 7's expense; actually, both Win7 and Win8 increased their share of the OS market. In fact, it looks like most of Windows 10's market share gains came at the expense of XP, something which could easily be explained by hardware replacement - Windows XP PCs are all old, remember, so their share of the market will continue to dwindle as those users replace those old machines as they wear out.

All of this continues trends that I've seen reported elsewhere, including slow sales of new PCs which aren't expected to rebound until 2018, slow adoption of Windows 10 by businesses, and the ongoing horribleness of Windows 10 inspiring people to roll back to earlier, better versions of the OS. But Microsoft's transparently dishonest attempts to convince us that Windows 10 is taking the PC world by storm are 100% pure manure.

Never believe the hype. The hype is always a lie.

The one surprising thing about August's numbers were the slight (-0.22%) down tick in Linux numbers. Considering just what a horrible experience Windows 10 is proving to be, and what a bug-ridden cluster fuck the Anniversary Update has been since Microsoft rolled it out, I was expecting to see Linux making gains, or at least holding steady, but it looks like frustrated users are simply retreating to the previous stable Windows versions that they know.

There is, after all, comfort in the familiar; I've been threatening to switch to dual-booting Linux for months, and have even purchased a new HDD to install it on, but haven't actually installed that piece of hardware yet, or the new OS, so I can relate. Windows 7 still works, and should keep working for years yet, so the average user may see no reason to go to all the hassle of installing, and then learning one's way around, an entirely new OS.

Here's the other reason why PC sales are in decline

Were you wondering why PC sales have been declining for 14 straight quarters, or why smartphone sales are also declining? The slow death of Moore's Law may be part of the answer.

From IEEE Spectrum:

After more than 50 years of miniaturization, the transistor could stop shrinking in just five years. That is the prediction of the 2015 International Technology Roadmap for Semiconductors, which was officially released earlier this month.

After 2021, the report forecasts, it will no longer be economically desirable for companies to continue to shrink the dimensions of transistors in microprocessors. Instead, chip manufacturers will turn to other means of boosting density, namely turning the transistor from a horizontal to a vertical geometry and building multiple layers of circuitry, one on top of another.

[...]

These roadmapping shifts may seem like trivial administrative changes. But “this is a major disruption, or earthquake, in the industry,” says analyst Dan Hutcheson, of the firm firm VLSI Research. U.S. semiconductor companies had reason to cooperate and identify common needs in the early 1990’s, at the outset of the roadmapping effort that eventually led to the ITRS’s creation in 1998. Suppliers had a hard time identifying what the semiconductor companies needed, he says, and it made sense for chip companies to collectively set priorities to make the most of limited R&D funding.

But the difficulty and expense associated with maintaining the leading edge of Moore’s Law has since resulted in significant consolidation. By Hutcheson’s count, 19 companies were developing and manufacturing logic chips with leading-edge transistors in 2001. Today, there are just four: Intel, TSMC, Samsung, and GlobalFoundries.

For those who've been paying attention, this isn't anything new.

Speaking of unrealistic expectations

I'm smelling some wishful thinking, from the direction of PC World:

Microsoft will end its free Windows 10 upgrade program on July 29, possibly giving an unexpected boost to PC shipments in the second half this year, according to IDC.

Buyers may opt to buy a new Windows 10 PCs instead of upgrading existing PCs with a paid version of the OS. Many businesses are evaluating Windows 10 and could also upgrade.

OK, so... Microsoft's Windows 10 giveaway is one of the reasons that PC sales are down, because people upgraded their old PCs with the new OS rather than buying new PCs. And they're down significantly:

PC shipments totaled 62.4 million units during the second quarter, declining by 4.5 percent compared to same quarter the previous year, according to an IDC survey released on Monday. IDC originally predicted a decline of 7.4 percent for the quarter.

Some improvements were thanks to gains in U.S. PC shipments, which grew by 4.9 percent during the second quarter.

The quarter’s numbers reverse a sustained double-digit decline in PC shipments dating back to the second quarter last year. PC shipments may be better in the second half, but declines will continue.

“The PC market continues to struggle as we wait for replacements to accelerate, along with some return of spending from phones, tablets, and other IT,” said Loren Loverde, vice president at IDC.

IDC is projecting year-over-year worldwide PC shipments to decline until 2018, but positive growth could return earlier than expected.

That's the very analyst that PC World are quoting, quoted in their own article, saying that PC shipments are going to continue declining until 2018, which is a year and a half after Microsoft stops giving away Windows 10... assuming, of course, that Redmond don't extend that "free" Windows 10 offer. How does that translate into "The end of free Windows 10 upgrades may boost PC sales?"

In what parallel universe does another year and half of declining sales constitute a boost to sales?