News

Vista Not a Magic Bullet for PC Market

• By Keith Ward
• May 24, 2007

Microsoft tends to tout the release of a new operating system as an earth-shattering event, certain to change computing as we know it. Take the Jan. 29, 2007 launch of Windows Vista: "The launch marks the achievement of an unprecedented collaboration between Microsoft and its customers and partners, and ushers in an era in which personal computing is easier, safer and more enjoyable than ever before," trumpeted a press release. "Windows Vista and Microsoft Office 2007 will transform the way people work and play," Microsoft Chairman Bill Gates gushed. "Windows Vista squarely address[es] the needs and aspirations of people around the globe."

The consumer and corporate world, however, has taken a less exalted view of Vista. That's according to a new report by market research firm In-Stat, which said that PC sales haven't been significantly impacted by Vista's release. Sales have remained steady and have followed the same trends they have for years, said Ian Lao, a senior In-Stat analyst and author of the report.

"If I were to look at Vista as a demand creation agent for PCs, it's not there. It's great for advancing the state-of-the-art and advancing the needs [of the consumer]," Lao says, but it hasn't been a "game-changer", to use a phrase Microsoft likes to employ.

"With the recent release of Vista, a short-term rise in PC demand is anticipated," Lao states in a press release. "System sales that had been muted waiting for systems pre-loaded with Vista rather than XP are expected to work through sales channels in the next two quarters. However, these sales represent an offset from last year rather than actual new demand creation."

The future looks equally, well, normal. In-Stat predicts that the industry is set to sell 300 million units in 2009, and the Vista release won't affect that prediction.

Lao says there were short-term effects on the market, but that even those were due to normal factors, not an overwhelming desire to upgrade from Microsoft's last OS, Windows XP. "Some things we anticipated would happen, happened. As the channel geared up for Vista, we had a delay in sales, because they had to flush the queue of XP boxes, and people waited to buy until Vista was released." Vista, too was delayed several months, until after the Christmas buying season.

That's not to say it's been selling badly. Microsoft made a show at its recent WinHEC conference about the 40 million Vista licenses that had been sold as proof of its popularity. But although those figures are impressive, Lao chalks them up more to regular buying patterns than the kind of frenzy that surrounds genuine events like the publication of a new Harry Potter book or release of the Sony PlayStation 3. For the average consumer or corporation, he says, "The OS doesn't play into the decision-making factors of whether or not I buy another PC."

Corporations, especially, buy almost strictly based on upgrade cycles, Lao says. He thinks the next very strong year for PC (and therefore Vista) sales could be 2009, when businesses are ready to buy new PCs.

That doesn't mean Lao doesn't like Vista as a technology. He does -- very much. He just doesn't think it's the dawn of a new computing day. "Are we looking at a new era, like the birth of the PDA, or the birth of the iPod?" he asks.

Not according to the numbers.