In-Stat: Vista not goosing PC sales

Vista unlikely to accelerate the PC market overall

Windows Vista's official release earlier this year may have distorted PC sales in the last six months, but it is unlikely to accelerate the market overall, a market research firm said Wednesday.

In-Stat said its research confirms earlier reports that the PC market in the last three months of 2006 plummeted, despite Microsoft's "Vista Express Upgrade" coupon program that made buyers of PCs with XP on them eligible for a free or heavily-discounted upgrade to Vista.

But after Vista's Jan. 30 consumer release, PC sales rebounded. That upward bounce, however, is not expected to last, according to Ian Lao, an analyst with In-Stat.

"The consumers that held off on buying a new PC until Vista arrived, that demand will have been serviced by the end of the second quarter this year," he said.

Vista's release is having even less effect on corporate customers, who continue to upgrade at their regular pace. While the new OS might be a "nice new operating system with good features," Lao said, overall it is not proving to be a "demand creator" for PC buyers.

In-Stat's research appears to contrast with IDC, which said in April that PC sales for the first quarter were up 10.9 percent year-over-year due to Vista. Analyst Loren Loverde said Vista will continue helping the PC market grow at double-digit rates for the next two years.

In-Stat said its forecast for the worldwide PC market to grow to 300 million computers sold in 2009 remains unchanged.

Lao declined to release other specific statistics, which he said were collected by tracking shipments of PCs from manufacturers to distributors, and doublechecking that with sales figures for processors and chipsets.

Vista's greatest impact may be on memory makers. The new operating system's expanded RAM requirements -- some experts claim power users need 4GB to run Vista well -- will boost sales by 20 percent year-over-year until the end of the decade, Lao said.

Not that manufacturers will be substantially boosting the amount of RAM they ship with each PC, he said. He expects PCs shipping with a premium version of Vista to come with 1GB of RAM in the form of two 512MB sticks.

But PCs shipped with Vista Home Basic may well come with two 256MB sticks of RAM for a total of 512MB, barely enough to meet Microsoft's "Windows Vista Capable" requirement. That will likely push users looking to upgrade their memory to replace not just one but both sticks of RAM.

Lao also said there is little evidence of PC makers "stuffing the channel," as inventory levels at distributors and wholesalers, after the build-up prior to Vista's January release, have gone back to normal.

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Eric Lai

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