Feeds

Vista: Gates backs Ballmer against confused analysts

Only Disconnect

High performance access to file storage

Bill Gates has defended sales of Windows Vista after Microsoft CEO Steve Ballmer chided analysts for being "overly aggressive" on the company's effect on the PC market.

According to Ballmer there's a "disconnect between what people think is the growth of the PC market and what they think is Vista growth. People have to understand our revenue models because I think some of the revenue forecasts I've seen out there for Windows Vista in fiscal year 08 are overly aggressive."

Expressing confusion when asked if Ballmer's comments indicated Microsoft was now being cautious, Gates said Windows Vista reviews had been "fantastic" and that retailers experienced a "very nice lift" in PC sales.

Microsoft's shares dropped almost three per cent last week after chief executive Ballmer said analysts are confusing growth of the PC market with Vista growth.

To be fair to Microsoft, some had jumped on early Current Analysis data showing a 67 per cent year-on-year spike in shipments of PC sales in the first-week of Windows Vista availability. The conclusion was that Windows Vista drove retail sales.

Microsoft derives more Windows client revenue from sales of PCs than from boxed copies of the operating system. So Windows Vista uptake depends heavily on PC shipments - especially in the consumer market.

NPD Group attributed January's surge in demand to some canny stock management by retailers who choked off inventory rather than stock redundant Windows XP PCs in the pre-launch days of January. The week before Windows Vista's launch saw a 59 per cent slump in desktop sales and a 20 per cent decline in notebooks - the first such drop in two years.

But who is to blame for overblown projections? As ever, Microsoft primed the pumps. Last year the company expected 400m PCs to be running Windows Vista 24 months after launch - compared to three years before Windows XP even half that on 210m.

Speaking at the January 30 launch, it was Ballmer who drew a connection between Windows Vista and PC sales. Windows Vista would perform "double " the business of Windows XP, he boasted "The opportunity we see to drive the technology industry, to drive PC sales, to drive new value from the consumer market to the business market is huge," he said.

Ballmer's words indicate a fundamental belief at Microsoft that Windows alone is sufficient to convince consumers and businesses to upgrade. Windows chief Jim Allchin in 2001 forecast - wrongly - Windows XP would lift flagging PC sales. In the case of Windows Vista, Microsoft is gambling on the six-year hiatus between Windows will persuade users into the streets.

Comparison between sales of Windows Vista and Windows XP are tricky, as they launched at different times of the year and Windows XP was available before official launch, unlike Windows Vista. On boxed copy, early indications are Windows Vista is behind Windows XP. Sales of Windows Vista were 59 per cent down on Windows XP in the first week, NPD said.®

High performance access to file storage

More from The Register

next story
Windows 8.1, which you probably haven't upgraded to yet, ALREADY OBSOLETE
Pre-Update versions of new Windows version will no longer support patches
Android engineer: We DIDN'T copy Apple OR follow Samsung's orders
Veep testifies for Samsung during Apple patent trial
OpenSSL Heartbleed: Bloody nose for open-source bleeding hearts
Bloke behind the cockup says not enough people are helping crucial crypto project
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
Half of Twitter's 'active users' are SILENT STALKERS
Nearly 50% have NEVER tweeted a word
Windows XP still has 27 per cent market share on its deathbed
Windows 7 making some gains on XP Death Day
Internet-of-stuff startup dumps NoSQL for ... SQL?
NoSQL taste great at first but lacks proper nutrients, says startup cloud whiz
US taxman blows Win XP deadline, must now spend millions on custom support
Gov't IT likened to 'a Model T with a lot of things on top of it'
Microsoft TIER SMEAR changes app prices whether devs ask or not
Some go up, some go down, Redmond goes silent
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.