No Vista 'pop' on 2007 PC sales, predicts Gartner

Only 'hundreds of thousands' of 2007 PC sales are attributed to Microsoft's newest OS offering

The launch of Windows Vista won't do much for PC sales this year, a research firm said Tuesday, with the new Microsoft operating system giving "at best, a limited boost" to PC units shipped during 2007.

Gartner's revised forecast now calls for a 10.5 percent increase in total systems sold, up from a late 2006 estimate of 9.9 percent, with a year's total of 255 million new machines. But only "hundreds of thousands" will be sold because of Vista, said George Shiffler, a Gartner research director.

"We don't expect Vista to be a big pop for sales," Shiffler said. Among the reasons: Only consumers and small businesses will be looking at Vista in the short term, and the operating system itself lacks the "must have" appeal that would move units.

"There was a hope last year, actually there were two, on the part of OEMs," said Shiffler. "One was that Vista would drive growth. The second was that demand would be strong enough that you could get prices to turn around. But in the dynamic of this market, those were pretty big hopes."

As with other research firms -- including Gartner in previous prognostications -- the revised forecast assumes that most consumers and small business won't rush to Vista but will slowly adopt it as they gradually replace existing PCs over the next several years.

And business buys of Vista will have "virtually no impact" on 2007's numbers, said Shiffler. Although corporations will mimic consumer purchasing patterns in some ways -- they too will replace rather than buy new now -- enterprises will move even more cautiously. Gartner expects that large businesses will delay broad Vista adoption until at least the middle of 2008, when they will probably begin their next PC replacement cycle.

One the plus side for Microsoft, said Shiffler, is that the Vista Home Premium version is enjoying a "pretty good" pickup by OEMs, bringing more dollars to Microsoft's bottom line since computer makers are paying more for Home Premium than they were for Windows XP Home.

"It's clear that Microsoft can recoup, but whether the OEMs will be able to, that we're still debating. On higher-end systems, prices may be more elastic, but on mainstream systems, I don't see it.

"The average selling price [ASP] will slow their rate of decline, but we won't see them rising," Shiffler said.

Gartner's 2007 forecast said that global PC revenues will climb 4.6 percent, to US$213.7 billion, that emerging markets and mobile PCs will continue to be the best opportunities for growth, and that system vendors will continue to feel the heat from falling ASPs, declines in desktop shipments to mature markets such as the U.S. and Europe, and a slowdown in computer replacement programs.

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Gregg Keizer

Computerworld

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