New PCs will be more desirable with Windows 10 Anniversary Update

Combined with the end of free upgrades to Windows 10, buyers could upgrade PCs to take advantage of features in Windows 10 Anniversary Update

Windows 10 was expected to save the slumping PC market, but it hasn't. PC shipments are still declining, and people haven't bought new hardware just to get Windows 10.

But the Windows 10 Anniversary Update has features that will make new hardware desirable. Moreover, the period to upgrade for free to Windows 10 from older versions has ended, and analysts believe people will buy a new PC instead of shelling out $119.99 to $199.99 for a Windows 10 license.

PC makers hope for nothing more than the death of Windows 7, which some users -- especially businesses -- have been hanging on to. Companies like Lenovo and HP are slowly getting rid of lingering Windows 7 Professional PC models, which will ultimately force holdover users to Windows 10.

Also, PCs with Intel's latest chip, code-named Kaby Lake -- which will start shipping in the third quarter -- will only support Windows 10.

The Windows 10 Anniversary Update became available on Tuesday. Devices that can be used as either laptops and tablets, also called 2-in-1s, are better-equipped to handle touch applications via Windows Ink and voice-based assistants like Cortana, both of which are getting major upgrades.

Microsoft hopes Windows Ink will make the use of digital pens ubiquitous, and it can be used in applications like Sticky Notes, Sketchpad, the Edge browser and Microsoft Office.

HP has worked with Microsoft to design laptops and 2-in-1s for Windows 10, and the Anniversary Update likely gives users a reason to buy laptops with touchscreens, good microphones, cameras and styluses, said Mike Nash, vice president of customer experience and portfolio strategy at HP.

A conventional laptop, meanwhile, will have the Windows 10 Anniversary Update, but won't take full advantage of new features. For example, the Windows Ink feature will create a whole new way of using productivity features in Windows 10, but it can't be used without a device that has a stylus.

Otherwise, a new feature called Xbox Play Anywhere will allow users to buy a game and play it on a PC or an Xbox. Many new games require powerful GPUs, which could also drive hardware upgrades.

PCs will also be more secure with the TPM 2.0 security specifications, designed for Windows 10 and made a compulsory feature on laptops, desktops and mobile devices starting July 28. That could make features like Windows Hello -- a biometric authentication system -- a common feature for logging into PCs. It will support logging in to web sites and apps.

For PC makers, the Windows 10 Anniversary Update is turning out to be a good time to chuck older Windows operating systems in new PCs. Lenovo "will migrate fully to Windows 10 as the operating system on new systems," though it will continue support for Windows 7, 8, and 8.1 systems.

"As the Windows 10 Anniversary Update begins on August 2, 2016, we are fully committed to shipping all Lenovo PCs with Windows 10 across both our consumer and commercial product lines, including the multimode Yoga convertibles, legendary ThinkPads, Y series gaming devices and Miix detachables," a Lenovo spokeswoman said in an e-mail.

Right now, it's possible to buy Windows 7 Professional PCs with a Windows 10 license from major PC makers so organizations can upgrade the OS when ready. Businesses are still buying Windows 7 PCs as they continue to test and fine-tune Windows 10 for use in organizations. Analysts expect upgrades to Windows 10 for these organizations to start later this year and continue into next year.

But time is limited to buy a PC with Windows 7. Sales of PCs with Windows 7 Professional pre-installed may end on Oct. 31, according to a Microsoft timeline. HP is leaning toward sticking to that deadline, after which its PCs will have only Windows 10. Lenovo is also making that transition. Dell offers the largest number of PCs with Windows 7 Professional with the upgrade option to Windows 10 Pro, but has been slowly cutting down the number of such models.

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