Exclusive: How the pandemic changed the PC business
Microsoft Windows chief Panos Panay tells Axios that the pandemic didn't just boost long-flagging computer sales, but also helped reinvigorate the PC as a critical tool for communication.
Why it matters: Sales of new computers have slowed significantly in recent months, but usage remains at record levels.
By the numbers: In making his case, Panay shared several statistics that he says outline the broader role Windows is playing for everyone from workers to families.
- More people are using Windows than ever before — a 20% monthly increase vs pre-pandemic.
- More time spent on Windows PCs: On average, people are spending 10% more time on each PC vs pre-pandemic.
- Customer satisfaction for Windows 11 is higher than any other previous version of Windows.
Yes, but: The pandemic-fueled PC buying spree is increasingly looking like a blip rather than a sustainable boost to annual sales.
- Just last week, AMD issued an earnings warning, blaming a weaker-than-expected PC market.
- And a fresh IDC report says computer sales were down 15% year-over-year in the third quarter, though they remain above pre-pandemic levels.
"I’m not saying there aren’t headwinds," Panay acknowledged.
The big picture: Who makes the computer and what operating system it uses has become less critical for many workers, students and consumers, with most key apps running in the browser and from the cloud, or being available across Macs and PCs.
- Windows still dominates the market for PC operating systems, but Apple has gained significant ground. Beyond grabbing a larger slice of the consumer market, Macs are now either standard or an option at many startups and a growing number of large companies, too.
- Chrome OS has also become a significant player — especially in education.
Gaming remains the key exception, with Windows dominating when it comes to computer-based game play.
- Microsoft faces more competition there from dedicated consoles than it does from the likes of Google or Apple.
- Although gaming activity overall has started to level off or drop from pandemic peaks, Panay said that time spent gaming on PCs remains at an all-time high, at a level set during the height of the pandemic.
Between the lines: While Apple and Google have a core group of customers who are all-in on their services, Panay says part of what makes Microsoft's PC operating system popular is it plays well with all of the major apps and services.
- "Does somebody else have a leg up?" Panay said in an interview. "I don’t think they do on choice, and I think choice matters to all of us."
Zoom in: Panay, whose official title is chief product officer, rose to prominence at Microsoft by spearheading Surface, the company's high-end hardware line, from its inception. Panay says Surface's role has evolved beyond the convertible tablet it debuted with more than a decade ago, but the product line still fills three big roles:
- Filling the "seam" between Windows hardware and software that arose historically because Microsoft controlled the software but a variety of manufacturers developed the machines.
- Expanding other computer makers' horizons on what's possible with Windows.
- Giving Windows a line-up of high-end devices to compete directly with Apple.
What's next: Microsoft is expected to introduce a crop of new Surface hardware at an event Wednesday. Panay said there won't be a new Surface Duo for the holidays, but said that the company isn't abandoning its Android-based phone effort.
- "We continue to innovate in the Duo space," Panay said, without offering further details.