How Can Windows 10 Reach 1 Billion Devices?

Microsoft Corporation MSFT wants Windows 10 to be installed on one billion devices within two to three years. Is this a realistic goal for the new OS or marketing hyperbole that will never be achieved?

"My guess is they're probably close to that many users, whether it's Windows 8, Windows 7, whatever," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "I would be surprised if they're not at that number already."

In December 2011, Microsoft told developers that there were 1.25 billion Windows PCs throughout the world. This included all versions of Windows, but 500 million of those licenses were for Windows 7. Users of both Windows 7 and Windows 8 can upgrade for free when Windows 10 is released.

Last year Microsoft announced that it had sold more than 200 million Windows 8 licenses. It's not clear how many of those were new purchases versus Windows 7 upgrades.

"As far as a billion-plus users, I don't think that's a huge stretch," said Udall.

Related Link: Microsoft's HoloLens Is What 'You'd Expect From A Cutting-Edge Technology Company'

Getting It Done

Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, doesn't doubt that Microsoft can spread Windows 10 to one billion devices.

"I actually think it's not as hard a number to hit as some might think," Moorhead told Benzinga.

More than 300 million PCs are shipped every year. Moorhead estimated that at least half (150 million) are consumer units that will run Windows 10 once the OS has been released. Over the next three years, that would allow Windows 10 to quickly appear on 450 million PCs (150 million x 3 = 450 million). The other 150 million will presumably go to the commercial market. Moorhead estimated that a significant chunk of those PCs will use Windows 10, totaling 225 million over the next three years.

"So you have 675 million just for PC users," said Moorhead. "Let's just say of all the billion installed base, only 20 percent upgrade to Windows 10. That becomes 200 million. That's 875 million. [Now] I've got to find another 125 million units over 1-2 years on Windows Phones and tablets."

Moorhead said this is a "huge number, but it's not a ludicrous number."

"It's an achievable number if they have reasonable success with Windows Phone and tablets and the PC market doesn't crater, which I don't think it will," he said. Xbox One will run Windows 10, so that's another area for Microsoft to expand its user base.

Conversion Could Matter Most

Rob Enderle, principal analyst at Enderle Group, told Benzinga that Microsoft can get to a billion users "if they can convert all the old PCs to Windows 10."

"They hope to pick up a lot of phones in the process," he said. "A lot of the old hardware out there is well past its due date, so I think they're gonna get there. Clearly they're doing everything they can think of, including providing the product for free."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.