News

Microsoft Boasts 17 Million XP Licenses

• By Scott Bekker
• January 09, 2002

The success of Windows XP is vitally important to Microsoft, and was widely hoped to spark a rebound in the PC industry until the Sept. 11 terrorist attacks dampened that prospect.

"Today, just 2 1/2 months after the launch of Windows XP, more than 17 million people are enjoying the new experiences, stability and security that Windows XP offers," Bill Gates, chairman and chief software architect at Microsoft, enthused during a keynote at the Consumer Electronics Show. "This is our best-selling release of Windows ever, and one that is creating great opportunities for PC manufacturers and our other partners in the industry."

Microsoft's high figures do not necessarily reflect actual shipments moving to live consumers or business users.

Microsoft includes sales of licensed copies to computer makers in its figures, a category that accounts for about 90 percent of the sales Microsoft is claiming. It's not clear whether computer makers have been able to turn around and sell all those systems to end users.

Retails sales only account for about 10 percent of Microsoft's sales claims, as documented earlier this month by the retail sales tracking firm NPD Techworld.

NPD Techworld found that at a time Microsoft was claiming 7 million sales of Windows XP, only about 650,000 copies could be accounted for from retail sales.

On a number of levels, the volume of Windows XP sales may have relatively little to do with the quality or features of the client operating system and more to do with structural factors.

For one thing, Windows XP is Microsoft's first operating system to unify the codebases of its consumer and business operating systems. No single Microsoft client operating system has ever been available for the home, office and workstation markets before.

For another, PC sales volumes are at a much higher level than they were at the time of the Windows 98 launch -- Microsoft's previous sales high watermark.

Proof of the structural growth in the Microsoft franchise can be seen indirectly in its comparisons to previous operating system sales. While Microsoft claims Windows XP shipments to PC makers are 300 percent higher than they were over the first 2 1/2 months of Windows 98 sales, Microsoft notes that the Windows XP shipments are only 200 percent higher than the first 2 1/2 months of Windows Me shipments.

That even though the Windows Me release had a lower marketing profile than the Windows 98 release and almost immediately earned a reputation among users as an unreliable and buggy operating system.

Meanwhile, the figures are roughly consistent with the run-rate that market research firm IDC is predicting for Windows XP in 2002.

"Seventy-five million WinXP licenses will ship in 2002, but XP won't have the clout that Windows 95 did in driving hardware sales or generating first-time users," IDC predicted earlier this month.