Microsoft’s Windows 10 Will See Increased Adoption in 2016
Microsoft's Growth Strategy Will Bear Fruit in 2016
Windows 10 sees faster adoption than its predecessor
In the prior part of the series, we discussed that for the PC market, 2015 was one of the worst years. Global PC shipments suffered their steepest fall in calendar 2Q15 since 2013. The PC market that was eagerly anticipating Microsoft’s (MSFT) Windows 10 launch failed to witness any uplift.
Microsoft then joined hands with its peers Intel (INTC), HP (HPQ), Dell, and Lenovo (LNVGY) to create an ad campaign to bring some hope to the PC market.
If we look at the chart above, which illustrates the adoption of Microsoft’s Windows 7, 8, and 10 in their first months after their respective releases, it shows that Windows 10, which was launched as a successor to Windows 8 on July 29, 2015, is doing well.
In its fiscal 1Q16 earnings release, Microsoft’s chief executive officer Satya Nadella stated that there were “more than 110 million monthly active devices running Windows 10.” He went on to state that Windows 10 adoption is “three times that of Windows 7 over the same time period after launch.” However, as it is a free upgrade, its performance can hardly be described as stunning.
Windows 10 adoption is likely to outdo Windows 7 adoption
Gartner’s IT analysts share the opinion of the above-mentioned statement. Gartner expects that 50% of enterprises are likely to start deployment of Windows 10 by January 2017 in anticipation of completing their migrations in 2019. Microsoft has announced that it will pull support for the Windows 7 OS in January 2020, which will prompt many businesses to start pilot programs in the first half of 2016. Windows 10’s “strong compatibility with Windows 7 applications and devices” will complement this migration.
Investors who wish to gain exposure to Microsoft can consider investing in the iShares U.S. Technology ETF (IYW) and the iShares Russell 1000 Value ETF (IWD). IYW and IWD invest ~12.5% and 2.0% of their holdings in Microsoft, respectively.
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