Can Windows 8 Prevent a PC Nosedive?

The question on the forefront of analysts’ minds is simple: can the impending launch of Microsoft’s (NASDAQ:MSFT) Windows 8, and the hardware built for it, resurrect personal-computer sales?

Many, including the Wall Street Journal, say the PC business has begun to nosedive, as evidenced by recent research reports. Sales have been low due to competition from tablets like Apple’s (NASDAQ:AAPL) iPad, economic conditions are less than ideal, and sales have slowed in emerging markets.

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Research firms IDC and Gartner reported that PC shipments fell by more than 8 percent, from a year earlier, in the third quarter. This is the steepest drop since 2001. Another report from IHS iSuppli supported their claim, their data showed shipments for the full year would contract for the first time in 11 years.

For the computer industry, it is “definitely a crossroads,” IDC analyst David Daoud told the Journal. “It could be a make it or break moment.”

“There was great hope through the first half that 2012 would prove to be a rebound year for the PC market,” analyst Craig Stice says in IHS’s report.

The theory has been put forth by market watchers that PC customers are waiting until Windows 8 becomes available to purchase a new computer. However, the severity of the slowdown in the third quarter is unusual. Ordinary, quarterly sales are boosted by back-to-school purchases.

At a conference in July, Microsoft’s chief executive Steve Ballmer said that Windows 8 was the most important launch for the company in 17 years. The operating system was developed to work both on traditional desktops and on touchscreen devices. Ahead of its release, PC manufacturers designed new models of desktops with touch screens and laptops that convert into tablets.

While PC companies have felt the competition from Apple eat away at profits, there has been more innovation in PC design in 2012 than in the whole of the last decade. One example, Intel’s (NASDAQ:INTC) Ultrabook, a lightweight laptop, was supposed to aid ailing sales this year.

But at an event last week, head of Hewlett-Packard’s (NYSE:HPQ) personal-computer business, Todd Bradley, said, “the core PC market is expected to stay flat, potentially through 2015.”

Hewlett-Packard, which IDC ranks as the world’s top PC maker, has seen sales decline this year by 16 percent, while shipments from the third-largest PC maker, Dell (NASDAQ:DELL), fell by 14 percent. In total U.S. shipments, Apple ranked third; its sales fell between 6.1 percent and 7 percent over the quarter.

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