People hoping for a rebound in personal computer sales saw a glimmer of hope in Microsoft’s latest earnings.
Microsoft (MSFT) CEO Satya Nadella said Thursday during a call with analysts that the consumer PC market, long in decline, is finally stabilizing. Nadella’s statement echoes a recent report by International Data Corporation in which the market research firm said it was optimistic that the PC market would rebound this year after five years of contraction as people switched to mobile devices.
Nadella, however, did not cite specific numbers showing that the consumer PC market was rallying. He merely said that video gamers seem to be buying high-end computers loaded with Microsoft’s Windows 10 operating system, raising hope of an overall recovery in the PC market.
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Additionally, Nadella said that businesses are increasingly upgrading to Windows 10, which is noteworthy because several other third-party research firms said in November that Windows 10 adoption numbers seemed low.
“I think the overall adoption cycle of Windows 10 in the enterprise is perhaps the best we have seen for any new release of Windows,” Nadella said.
Still, Microsoft’s personal computing business unit that includes Windows 10 dropped 5% year-over-year in the latest quarter to $11.8 billion. Still, the unit’s revenue was better than what the company had originally projected because of an unexpected uptick in Windows 10 sales, said chief financial officer Amy Hood.
Hood attributed the sale of Microsoft’s phone business in November as the primary reason that sales in the company’s personal computing business unit declined in the latest quarter. Phones sales were lumped in with Windows along with Surface hybrid laptops.
Microsoft said that the money it collects from sales of Windows by other PC makers rose 5% in the latest quarter, which Nadella said highlights an “improving commercial PC market and enterprise demand.”
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Nadella said that computer manufacturers that use Windows are seeing an uptick in sales of high-end PCs. He took credit for the rise by saying that the Surface blazed the trail for other manufacturers to create similar devices, which are selling well.
“The enterprise adoption of these new devices is driving the all around excitement of Windows 10,” Nadella said.