Robert Pogson

• 2011-10-20 “over 450 million licences sold since launch”
• 2011-7-21 “over 400 million licenses and business deployments continue to accelerate”
• 2011-4-28 “fastest selling operating system in history with 350 million licenses sold”
• 2011-1-27 “over 300 million Windows 7 licenses”
• 2010-10-28 “a healthy and sustaining business PC refresh cycle”
• 2010-7-22 “sold more than 175 million licenses to date”
• 2010-4-22 “continues to be a growth engine”
• 2010-1-28 “This is a record quarter for Windows units”
• 2009-10-23 “pleased by the early positive response we are receiving for these products”

Release date was 2009-19-20. One picture is worth a thousand words so,.

That’s not accelerating growth folks. It has flattened considerably to about 50million per quarter when the world is selling 90million PCs per quarter, about 55% attachment rate. What’s on those other PCs? It can’t be Vista because the webstats say it’s in decline. It can’t be XP because the webstats say it’s in decline. It can’t be MacOS because Apple is shipping only 4.3% of the world’s notebook/desktop PCs. That leaves GNU/Linux and FreeDOS, folks.

UPDATE Lenovo ships a bunch of PCs with no OS and discourages people from buying if they have a volume licensing agreement with M$. So, it appears the missing PCs are not getting that treatment from businesses. The mystery deepens.

UPDATE This is a clue. At the bend in the curve sales of PCs with XP and retail sales of Vista were stopped…

So Vista has been tapered off for several quarters. It cannot be the cause of the decline… Wait! At the bend in the curve ended sales of PCs with XP installed and end of retail sales of Vista! Now “7″ has to go along on its own and it sells fewer PCs as a result.

I found a link to a retail establishment in Romania. The score:

• PCs with that other OS: 136
• PCs with GNU/Linux: 42
• PCs with FreeDOS: 140
• PCs with MacOS: 6

You can argue that with such a high proportion of FreeDOS that many intend to buy those machines to install a copy of that other OS illegally but schools and businesses often install by copying legally and we know only a very small proportion of humanity has the inclination to install an OS so I am betting the distribution of the FreeDOS machines is something like the split between that other OS and GNU/Linux, about 3:1. According to Trends.Google.com, linux:windows was 2:3 in 2004 and 1:9 in 2011. I guess it pays to advertise.

It looks like GNU/Linux is doing well in Romania. Of the top 10 best-selling PCs, the top 4 are FreeDOS, and 9 are FreeDOS. The 13th best seller has GNU/Linux. It is also interesting to see that Dell, HP, Acer are all selling PCs with GNU/Linux and that most of the PCs with that other OS cost a lot more. The top-selling GNU/Linux notebook is 15.6 inches and costs 1500 with GNU/Linux and 1950 with that other OS. Competition on price/performance is alive and well in some places.

see eMag

It’s a bricks-and-mortar chain of stores with multiple locations all over Romania.

From M$’s last SEC filing:
“NOTE 11 INCOME TAXES
Our effective tax rates were approximately 21% and 25% for the three months ended September 30, 2011 and 2010, respectively. Our effective tax rate was lower than the U.S. federal statutory rate and our prior year’s first quarter effective rate primarily due to a higher mix of earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland, Singapore, and Puerto Rico, which are subject to lower income tax rates.
Tax contingencies and other tax liabilities were $7.5 billion and $7.4 billion as of September 30, 2011 and June 30, 2011, respectively, and are included in other long-term liabilities. While we settled a portion of the I.R.S. audit for tax years 2004 to 2006 during the third quarter of fiscal year 2011, we remain under audit for these years. During the fourth quarter of fiscal year 2011, the I.R.S. completed its examination and issued a Revenue Agent’s Report (“RAR”) for the remaining unresolved items. We do not agree with the adjustments in the RAR, and we have filed a protest to initiate the administrative appeals process. The proposed adjustments are primarily related to transfer pricing and could have a significant impact on our financial statements if not resolved favorably. We do not believe it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months, as we do not believe the appeals process will be concluded within the next 12 months. We also continue to be subject to examination by the I.R.S. for tax years 2007 to 2011.”

I am not an accountant, tax-man or any sort of expert on these matters but the plain language implies that M$ is not paying US taxes on revenue obtained in other parts of the world. That is reasonable if the product being sold was DVDs etc., but M$ is in the business of selling licences to “intellectual property” which originates in the USA. M$ appears to be taking a tax deduction on the “R&D” done in the USA but dodging revenue obtained elsewhere. Is there a fiction that for BSA’s purposes, “Intellectual Property” is valuable everywhere but for tax purposes, that property flows elsewhere for $0 and is sold for a handsome profit overseas? M$, in its prime, paid no income tax whatsoever and half of M$’s huge nest egg of $60billion is overseas. The liabilities could be huge.

I can see why the US tax-men need to audit M$ but I don’t see why they are apparently so many years behind. Has the darling of capitalists been getting a free ride at ordinary tax-payers’ expense? The quarterly report lists tax contingencies at $7billion+.

Al Capone was an organized criminal, who, in spite of diverse criminal activity even murder was eventually brought to justice by the tax-men. Wouldn’t it be sweet if that is eventually M$’s downfall? Paying their fair share for the operation of the government that protected M$ from competition would be some form of justice although just a drop in the bucket of their ill-gotten gains. It would be better if some of their leadership did jail-time for tax evasion.

In reality, the harm done to the USA by M$ is much larger than the tax liabilities. Re-re-reboots alone in the USA probably amount to a dozen or more per PC per annum. Then there are attacks by malware, stifling competition, waste of perfectly good PCs on the Wintel conveyor-belt to the dump, high prices, and now the patent-trolling. It’s high time the USA quit drinking M$’s Koolaid. Canada and the rest of the world should do the same. I recommend Debian GNU/Linux as a refreshing replacement for that other OS. It works for you and not for M$.