Paul Thurrott:

It’s not pat to say that the Windows PC market went for volume over quality, because it did: Many of those 20 million Windows 7 licenses each month—too many, I think—went to machines that are basically throwaway, plastic crap. Netbooks didn’t just rejuvenate the market just as Windows 7 appeared, they also destroyed it from within: Now consumers expect to pay next to nothing for a Windows PC. Most of them simply refuse to pay for more expensive Windows PCs.

Thurrott’s argument is very interesting. While the PCs sales were in decline, notebooks seemed to be the solution. They were cheap and sold relatively well, despite low margins. Quantity was the objective. They helped grow the number of Windows 7 activations too. In the long term however, they harmed the PC market. People now expect to buy Windows computers for less than $400.

When Microsoft releases Windows 8 and tries to reverse the trend with more expensive tablets and computers, they don’t sell well, because people expect lower prices.

It makes a lot of sense and it reminds me of many discussions I had with friends who don’t consider buying a PC for more than €400-€500 anymore. Maybe Microsoft should indeed use Windows 8 to reverse the trend, but decrease its prices a tiny bit. I’m not sure.