Windows 11 migration heats up... on desktops

What about notebooks, including AI-ready devices? Ah well, still months to go, eh Microsoft

With fewer than four months before Microsoft pulls the plug on standard support for Windows 10, businesses are replacing dusty – but in some cases perfectly working – desktop PCs in preparation for the migration to the little loved next generation of the Windows OS.

Fresh stats from channel watcher Context this week show that in the first two months of calendar Q2 (April and May), distributors and resellers across Europe shipped 22 percent more desktops to enterprise customers.

Revenue generated by those sales, also on a year-on-year basis, went up 17 percent. "Commercial refresh cycles and the looming end-of-support for Windows 10 are fuelling a surge in desktop demand," said Context senior analyst Marie Christine Pygott.

"Desktops have been the standout performer over the past six months," she added. "Their share of total PC revenues in early Q2 reached nearly 17 percent, the highest level in Context's two-year reporting period. This reflects both a long-overdue refresh cycle in commercial environments and the typical spike in demand ahead of major OS support deadlines."

The high spots included Germany where the sales leap even led to "availability constraints in some cases," the UK which saw a bounce in commercial and consumer desktops, and Poland in retail and SME sectors.

According to StatCounter, Windows 10 accounted for 53.9 percent of the desktop Windows version market share globally in May, and Windows 11 some 43.22 percent. Customers have resisted the move to Microsoft's latest OS.

A slowing economy has seen some enterprises hold off the upgrade cycle and hardware incompatibilities (older machines with non-supported CPUs, TPMs) has resulted in a slower OS migration too. Yet with mere months before Windows 10 goes end of life and software patches are turned off by Microsoft, some more customers are finally making a move.

The relatively sluggish pace of refresh has caught out all of the major PC makers with Michael Dell admitting last October on an earnings call that it "has been delayed for sure." In its most recent results for Q1 of fiscal 2026 ended April 30, Dell chief operating officer Jeff Clarke said:

"We have the Windows 10 expiration in the PC business. We see good traction. We're clearly in the refresh cycle. It's certainly behind others. But indications are we are seeing good growth."

HP boss Enrique Lores talked in October of the aging installed base of computers in the market, saying they were bought during the early years of the pandemic and "have to be replaced." HP lowered guidance for PC sales in the second half of its fiscal 2025 to low single digits of percentage growth, indicating the Windows 11 refresh perhaps isn't the catalyzer it once was.

On a conference call to discuss financial results for HP's Q2 ended April 30, Lores said [PDF] HP had seen strong demand for PCs, particularly in its commercial division, and blamed other factors for the slowing sales forecast in the quarters to come.

"First of all, we are, today, in a very different economic situation from where we were a few months ago in terms of both consumer and business confidence. Second, we have seen announcements across the industry for price increases in the second half, and we think the combination of both will potentially have an impact in the demand that we see."

This is no doubt a reference to the on-and-off tariff dance performed by US President Donald Trump that has the tech industry and other industries waiting to see what moves the former reality gameshow host will make next.

HP CFO Karen Parkhill chimed in on the same earnings conference call, saying: "Win 11 does remain a catalyst for the back half. And if demand comes in stronger than our moderated guide, that will be reflected in our results."

As for notebook sales in the first two months of calendar Q2? Context said unit sales by distributors were up just 2 percent and revenue was up by 7 percent, indicating a bigger mix of higher margin AI devices. These machines are "quietly building momentum in the commercial space," said Pygott.

AI-ready notebooks (those containing dedicated NPUs) accounted for 40-41 percent of notebook volumes in recent months, yet this was down to vendors pushing these devices on distributors, and "not customer pull," Context confirmed.

A number of factors are limiting adoption of AI PCs: these include no killer app and prices that are between 10 to 20 percent higher than traditional devices.

So for the moment at least, it seems that the good old fashioned desktops form factor is helping Microsoft do some of the heavy lifting when it comes to the Windows 11 migration. ®