Vista delay to impact PC sales say analysts

The fallout from Microsoft’s decision to delay the releases of Vista and Office 2007 was continuing last week, with analysts claiming worldwide PC sales could drop as a result, and warning that further delays of the product lines were strong possibilities.

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By  Peter Branton Published  April 2, 2006

The fallout from Microsoft’s decision to delay the releases of Vista and Office 2007 was continuing last week, with analysts claiming worldwide PC sales could drop as a result, and warning that further delays of the product lines were strong possibilities. Microsoft’s announcement that it was delaying the consumer launch of Vista until January next year caused consternation among PC makers and dealers, with many fearing that sales lost during the all-important holiday buying period would be lost permanently. US investment banking firm Lehman Brothers said last month that it had lowered its PC unit growth forecast for 2006 from 12.4% to 9.8%, with revenue growth expected to plummet from 5% to just 1% for this year. The firm said it was basing this forecast on its findings for first quarter sales but said that “In addition, our desktop forecast in 2006 reflects the possibility of a pause in front of the Vista launch,” in its report. Research firm IDC was more optimistic however, saying that while sales may be delayed as customers waited for Vista, it did not expect them to be lost altogether. “Some consumers will certainly delay PC purchases until Vista is available, but we expect the delay to shift only moderate volume from the fourth quarter of 2006 into 2007 and will not cause a loss of sales,” said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker, in a statement. “The timing of the release will have some impact on when consumers buy, but not so much on whether or not they buy,” Loverde added. Microsoft’s regional operation said it was confident this prediction would hold true here: “Our partners — including OEMs, retailers and other partners — are being informed of this change and we are working closely with them to plan accordingly. However, according to researchers at IDC, this should not impact PC sales significantly, and we would expect this to be the case in the Gulf region,” said Adriana Rangel, Windows Client Business Group Lead, at Microsoft Gulf. In terms of the Arabic versions for Vista and Office 2007, Rangel acknowledged these would be impacted. “At this time, we do not expect that we will launch English and Arabic simultaneously, but we do not expect a significant delay between the two,” she admitted. However, research firm Gartner said that further delays in delivery on Vista are a possibility: “Now that Microsoft will miss the 2006 holiday season, it will likely feel less pressure to ship the product on schedule and Vista delivery could slip further without significant penalty,” it said in an advisory. Microsoft has already moved to tighten up the Windows team, promoting the highly-rated Steven Sinofsky from its Office division to head up planning and development for future versions of Windows.

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