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Microsoft partners seriously underwhelmed by Windows 8.1

Can we sell it? No, non, nein

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Microsoft CEO Steve Ballmer promised a flood of touch-enabled devices to fill the market as he previewed Windows 8.1, but is the technology channel raring to snap them up? Not really, it seems.

Redmond's very own bald eagle last night said the "rapid release" upgrade - which comes with a revolutionary Start button - will blend "desktop and modern computing experiences", and the market should expect "literally an outpouring" of touch devices.

But it may be a case of once bitten, twice shy for some in the channel who bought into Microsoft's Win8 launch hype last October and found themselves sitting on a heap of kit that was not moving.

Jeremy Davies, CEO at channel analyst Context, told us the redesign of Win8 may make it more user-friendly "but it won't revitalise the PC industry".

Windows 8 failed to prevent sliding sales last year and according to forecasts (IDC, Gartner and Canalys), 8.1 will also fail to shift the gear this year.

Davies told The Channel: "An OS launch no longer creates a wave of new purchases. Windows 8.1 may staunch the wound, correct past mistakes but it will not wipe out the impact of the economy or the fact that people want tablets and smartphones."

The problems, according to the venerable analyst, can be traced back to the Surface "bombshell" that shocked Microsoft's OEM pals, who in turn didn't make enough touch devices.

Even Microsoft admitted the Win8 marketing campaign was "very touch-centric" and fewer than two per cent of the devices sold following the launch boasted touch capability.

Distributors told us earlier this week that they got carried away with Windows 8, which came after a long hard slog in the desktops and notebook sector during 2011 and 2012.

Win8 stock in the distribution channel was on average 20 to 25 per cent higher than most would like - distributors tend to carry between four to six weeks of stock - ahead of new touch units shipping.

But sources tell us it was so much worse than the figures would suggest. HP, for example, overhauled its PC line-up to include only Windows 8 systems, whereas Lenovo wasn't nearly so confident about the new OS.

One large wholesaler today told us that Windows 8.1 "will have a start button and that is a good thing" to assuage critics of the Metro interface design.

But he warned, "It is a consumer-focused product and so far consumers haven't liked it. Businesses are buying Win8 machines but downgrading it to Windows 7," he said.

"Will Windows 8.1 change the world? My gut feel is that sales will be the same as before. We are not forecasting an uplift," said our distie source.

So distributors are not preparing for a spike in demand from their customers.

Several channel partners, retailers and B2B resellers concur that the tweaked Windows OS may fix some functionality gripes that consumers had, but this should have been done before launch.

Price is another contributing factor, with consumers showing greater interest in lower cost tabs.

OEMs are not helped by having to cough up £100 to Microsoft to install its OS, when Google's Android is free.

"If pricing became ultra aggressive they [OEMs] might have a chance," said one channel source.

In Q1 2012, 30 per cent of the tablets sold worldwide were sub-$400, according to data from Canalys, but fast-forward a year and 46 per cent of the market had shifted to lower-cost devices.

Average sales prices in that year fell 15 per cent as Apple debuted the iPad Mini, and Amazon and Google released their own branded systems.

In the enterprise world, businesses generally start upgrading to a new OS some fifteen months after it has been launched.

A sizeable B2B reseller told us that a "lack of apps" was a challenge for his customers, on top of the pricing issue.

Sources wanted to talk anonymously for fear of upsetting Microsoft and its OEM partners, as not many were impressed by Microsoft's tweaked OS - but some were.

Richard Logan, public and corporate sales director at Misco, said the changes show Microsoft "is listening to its customers".

"The option to boot directly to the familiar and 'classic' desktop avoiding the tile style interface should make enterprise customers more open to adopting Windows 8. It removes a concern related to the need for retraining employees," he said. ®

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