Microsoft's strategic transition from Windows 10 to Windows 11 has significantly influenced the global PC market, particularly in the enterprise sector. As the end-of-support date for Windows 10 approaches in October 2025, businesses are accelerating their adoption of Windows 11, leading to a notable increase in PC shipments.
In the second quarter of 2025, global PC shipments rose by 6.5% year-over-year, reaching 68.4 million units, according to IDC. This growth is largely attributed to enterprises upgrading their systems in preparation for Windows 11. Lenovo led the market with a 24.8% share, followed by HP at 20.7% and Dell Technologies at 14.3%. All three companies offer devices powered by Windows, underscoring Microsoft's pervasive influence in the PC ecosystem.
Despite this progress, a significant portion of PCs have yet to transition to Windows 11. A study by ControlUp revealed that approximately 40% of enterprise PCs and 50% of consumer PCs are still running Windows 10. Encouragingly, 87% of these unupgraded PCs are compatible with Windows 11, facilitating a smoother transition. However, 25% of consumer PCs and 24% of business PCs may require replacement due to incompatibility. Sectors such as healthcare, finance, and government are lagging in upgrade readiness, while European markets are ahead of North America in migration efforts.
To enhance the Windows 11 experience, Microsoft has introduced Copilot+ PCs, AI-optimized devices featuring exclusive capabilities like Recall, Click to Do, and an improved Windows search. Collaborations with companies like Adobe, Canva, and Zoom aim to integrate AI applications, boosting user engagement. However, the adoption of AI-capable PCs is still in its early stages. In Q4 2024, AI-capable PC shipments accounted for 23% of all PC shipments, with Apple leading at a 45% share, followed by Lenovo and HP at 15% and 14%, respectively.
Microsoft faces stiff competition from Alphabet's ChromeOS and Apple's macOS. ChromeOS has evolved into a secure, AI-focused operating system, with devices like the Lenovo Chromebook Plus 14 offering features such as smart grouping and AI image editing. Apple's Mac devices, powered by the M4 family of chips, have gained market share, with the company planning to launch M5 chip-powered MacBooks in the fall of 2025.
Financially, Microsoft has demonstrated strong performance. As of July 18, 2025, MSFT shares are trading at $510.54, with a market capitalization of approximately $2.79 trillion. The company's forward 12-month Price/Sales ratio stands at 12.04x, compared to the industry's 8.97x. The Zacks Consensus Estimate for Microsoft's fiscal 2025 earnings is $13.34 per share, indicating a 13.05% year-over-year growth.
In summary, Microsoft's transition to Windows 11 has catalyzed enterprise PC upgrades, contributing to global shipment growth. While challenges remain, particularly in sectors slow to adopt the new OS, Microsoft's innovations and strategic partnerships position it well in the competitive landscape.
Source: The Globe and Mail Steady Transition to Windows 11 Aids MSFT: What's the Path Forward?
