Why are Vista sales tapering off?

Logo Windows VistaMicrosoft is blaming its disappointing third quarter client software sales on factors that exclude Vista. Meanwhile, though, a variety of evidence indicates that many Windows XP users aren't upgrading, but switching to Mac or Linux.

"With respect to [the] third-quarter in particular, there's really no Vista-related issues at all," said Microsoft CFO and Senior VP Chris Liddell, during a conference call on Thursday. There, Microsoft reported a year-over-year drop in sales of 24% for Windows desktop operating systems in the third quarter of Microsoft's fiscal year.

"Unlicensed PCs [is] not a Vista issue. Emerging markets growing faster than mature markets, that's not really a Vista issue. A bit of a channel shift to larger OEMs, again not a Vista issue," according to Liddell. "I guess the only impact really is the [Vista] launch last year, and the very strong comparables that we have. But that's not really a comment about this quarter. It's more a comment on the year ago quarter and the comparable."

With his comment about the "comparables," Liddell was referring to Microsoft's revenues of $4 billion for all Windows desktop OS software for the third quarter of the current fiscal year, in comparison to $5.3 billion for the same quarter the year before.

According to Microsoft, the figures from the year before were unusually high because they included not just desktop OS licenses sold during that quarter, but also $1.2 billion in pre-release sales of Vista from a Vista upgrade program held the previous fall, which were rolled in with Microsoft's third quarter numbers for early last year.

With the pre-release sales taken out of the equation, however, year-to-year sales of Windows desktop versions were just about the same for the two quarters, showing no real improvement in the three months that ended on March 31, despite Microsoft's introduction of a major new edition of its desktop OS.

Yet as one big indicator that a lot of users are still sticking with Windows XP, Lenovo and Hewlett-Packard have now joined Dell in offering customers "downgrade" licenses for pre-installing XP, for use after Microsoft's stated XP sales cutoff date.

The downgrade licenses will take advantage of a licensing loophole in Vista Ultimate and Vista Business that allow customers to buy XP under a Vista wrapper, so that Microsoft can count the sales as Vista rather than XP licenses.

Meanwhile, after its own most recent quarter, Apple announced sales of 2.29 million Macs during the quarter, representing a 51% growth rate over the same period the previous year.

Source: BetaNews

Tags: Dell, Lenovo, Linux, Microsoft, Windows Vista

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