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Microsoft Milestone: How It Could Get to 1 Billion Windows 10 Devices

By Donna Fuscaldo - Oct 5, 2019 at 9:22AM

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It recently hit 900 million, closing in on its long-stated goal to have 1 billion by 2020.

Microsoft (MSFT -0.26%) is closing in on its long-stated goal to have Windows 10 installed on 1 billion devices by 2020 after hitting the 900 million mark in late September.

What's notable is the growth it's seen over the past several months. According to a Sept. 24 tweet from Yusuf Mehdi, corporate vice president of the modern life, search and devices group at Microsoft, the company added "more new Windows 10 devices during the past 12 months than ever before." 

While PCs and laptops likely accounted for much of that growth, Mehdi also credited other devices, such as the company's HoloLens ("mixed reality" headset), Xbox gaming console, and Surface Hub (a digital whiteboard). 

In March, Microsoft hit 800 million Windows 10 devices. That was up from 700 million in the fall. The company originally set 2018 for the year it would reach 1 billion installs of the operating system released in 2015, but with its foray into the smartphone market failing, it pushed that out to 2020. 

A computer displaying a Windows 10 home screen is shown next to the Windows logo

Image source: Microsoft.

What's driving Windows 10 adoption?

Microsoft is ending support for its popular Windows 7 operating system (which was released in 2009) on Jan. 14, making an upgrade to Windows 10 an attractive move. According to market research firm Net Marketshare, as of September, Windows 10 had market share of 52% of all desktops and laptops, compared to 28% for Windows 7, a flip from a year prior, when Windows 7 had slightly more share than Windows 10.

Microsoft is trying to get everyone on board with Windows 10, including business customers, before that date, pushing them to upgrade rather than purchase an extended security updates program for Windows 7 that would give access to critical security updates for three years after support ends.  

When Microsoft reported fiscal fourth-quarter earnings in July, it posted a 7% increase in Windows revenue compared with a year earlier, a $368 million jump. Sales by original equipment manufacturers selling devices with the Pro version of Windows were particularly strong, with an 18% year-over-year increase. Microsoft attributed that growth to more companies moving to Windows 10 before Windows 7 loses support. It predicted a continuation of that in the next few quarters. 

New Surface devices could help it hit 1 billion  

So how does Microsoft get the next 100 million Windows 10 devices by the end of 2020?

Perhaps with the new Surface laptops and devices it announced this week. During an event held in New York City, the software giant rolled out a series of devices in time for this year's holiday season. It included the new Surface Laptop 3 -- an always-on, ultra-thin laptop that comes in 13-inch and 15-inch screen versions. It also rolled out two new Surface Pros and wireless earbuds that integrate with its Windows OS. Users can send voice memos to Microsoft applications directly from the earbuds.

But even more tantalizing for its goal of 1 billion Windows 10 devices is what it teased for next year. Microsoft debuted two foldable devices: the Surface Neo and the Surface Duo.

The Surface Neo is a foldable tablet aimed at the business market. Microsoft didn't say when that will be available. The Surface Duo marks Microsoft's second try at the smartphone market. The Android-based device, which will be ready for the holidays in 2020, has two 5.6-inch displays connected by a hinge that enables it to fold into pocket-size.

It's the first time Microsoft is producing a device for the masses not running on Windows. However, it will include some of Windows 10X, a new operating system it's creating to support dual screens and foldable devices, making those devices part of the 1 billion. Microsoft is making a big bet with Windows 10X by creating an OS for devices that don't exist today. 

With new devices coming to the market, Microsoft is well-positioned to meet its goal of 1 billion devices using Windows 10 by 2020.  

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Microsoft. The Motley Fool has the following options: long January 2021 $85 calls on Microsoft. The Motley Fool has a disclosure policy.

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