Microsoft Plays Down a Sales Lift From Vista
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Wall Street analysts are being too optimistic about sales of Windows Vista, Steven A. Ballmer, Microsoftâs chief executive, said on Thursday.
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Microsoft Corp. said on Friday it  expects to complete less than one-quarter of a $20 billion  share buyback this week, shifting the rest of the buyback to  later dates -- a move that traders said was boosting its stock  price.
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The abundant mix of both upward and downward slopes that have characterized Microsoft Windows Vista sales projections since last September, has led many experts to ask: Has Windows evolved out of its shell as a consumer product, into the homogeneous commodity that Microsoft simultaneously hoped and feared it might become?
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Blog: In a conference call to talk about hardware problems, Microsoft also notes that it failed to hit its goal of selling 12 million units by the end of June.
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Stocks fell on Friday after Microsoft Corp.'s  chief executive said analysts' revenue forecasts for the Vista operating system were overly aggressive and weak housing data prompted economic worries.
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(InfoWorld) - Microsoft may be having trouble selling Windows Vista in retail, but its Office line is going like gangbusters, according to market research firm NPD Group. Part of the reason: People who switch from PCs to Macs. Office 2007 on Windows is selling at roughly double the rate its predecessor, Office 2003, did in its first months after release, NPD analyst Chris Swenson said Wednesday. "Any way you cut it, the first six months, or a similar January-through-July period, or the first week or even the first month [of sales], no matter how you slice it, Office 2007 is selling much better than Office 2003 did," said Swenson. And even though Office 2004 for Mac is far from new, Swenson said, it's also contributing to Microsoft's suite success. "Mac Office represents about 20 percent of all Office sales in U.S. retail. At first, that seemed really surprising, but if I'm switching to Mac, there are a few key [software] products I'm going to buy, and Office is one of them." In other words, even though they're leaving the PC behind and abandoning Windows, newly-minted Mac owners are still shoveling money at Microsoft, Swenson said. "Microsoft's still making the Office sale," he said. Swenson's data comes from NPD's monthly reports of software sold at major U.S. retailers such as Best Buy and CompUSA as well as data from the more than 180 Apple retail stores and a few online sellers, including Amazon.com and Buy.com. Mac switchers aside, Microsoft's unheralded success selling Office -- Swenson noted that it typically gets buried by the bad news about Vista's retail performance -- stems from smart pricing. "The most important thing is the pricing of Home and Student 2007," he said, talking about the $149 package that lets customers install the software on up to three PCs. "Eighty percent of all copies sold at retail are this edition," said Swenson. "When Microsoft came out with version 2.0 of [this package], it started seeing increases not only in unit volume, but also in dollars." Swenson was referring to the licensing changes Microsoft made to the student-priced edition in 2003 that bumped up the number of allowed installs in the same household from one to three. Second on Swenson's list of reasons for Office 2007's success is something Microsoft has little control over. "Part of it is clearly installed base," he said. "There are roughly 100 million more PCs now than there were in 2001, so even if the same percentage of users buy Office, sales go up." But if Office 2007 is outselling its forerunner, why did the company just roll out a $59.95 promotional price to students? "I think they want to drive demand for [Office 2007] Ultimate," said Swenson. "It's just not doing as well as Ultimate on Vista." The Microsoft promotion, which runs through April 30, 2008, is available immediately to enrolled students in the U.S., Canada, and the U.K. who have a matching educational institution e-mail address. Next week, the program will expand to France, Italy, and Spain. Office Ultimate 2007, which lists for $679.95, includes Word, Excel, PowerPoint, Outlook, Access, Publisher, OneNote, Groove, and InfoPath. Computerworld is an InfoWorld affiliate
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Retail sales of boxed copies of Windows Vista in the first week after its launch were almost 60% below sales of boxed copies of Windows XP in the same time frame after its launch in 2001, according to the NPD Group Inc., a leading market research group.
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First-week sales of the new OS by itself trail those of its predecessor, though sales of new PCs with Vista have been stronger, NPD says.
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Microsoft Corp.   said on Thursday it sees no reason why its new Windows Vista  operating system would be delayed, but it stopped short of  committing to its previously stated launch target.
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(InfoWorld) - Microsoft chief executive officer Steve Ballmer believes that sales forecasts for itsÂ new Vista operating systemÂ may be "overly aggressive." In a conference call Thursday with financial analysts Ballmer said lower selling prices, limited new corporate sales, and software piracy may combine to temper Vista sales forecasts. "I'm really excited about how enthusiastic everybody is about Vista," he said. "But people have to understand that some of the revenue forecasts I've seen out there for Windows Vista in fiscal year 2008 are overly aggressive." Microsoft's 2008 fiscal year begins this July 1. Ballmer did not provide specific sales numbers. Sales of Microsoft's Windows operating systems are driven by the growth in sales of personal computers (PCs), Ballmer explained. But PC sales growth tends to come more from the consumer market these days than the business market. Also, while Ballmer expects Vista to see greater sales growth in emerging markets such as in China, India, and Brazil, that growth will be on a smaller base than in developed countries. Also, those emerging markets are alsoÂ high-piracy markets. Even though Microsoft has added features to Vista to thwart piracy, it is still a problem in some countries, he said. And while Microsoft sold a lot of Vista upgrades to corporate customers, they have already been accounted for in previously signed contracts, so forecasts of additional corporate sales "may be a little more bullish" than is warranted, he said. Vista is the first totally new desktop operating system from Microsoft since the introduction of Windows XP in 2001. Vista has been much-delayed in coming to market as the company tried to avoid releasing a product with defects and security flaws that plagued previous Windows versions. Although Ballmer reported a strong early surge in Vista sales, which began for corporate customers in November 2006 and for consumers in late January, the surge may be limited to what's left of fiscal 2007 and "will not recur in fiscal year 2008."
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Although Windows Vista has been on sale for nearly nine months, Microsoft has yet to seriously market the operating system, letting a certain rival control public mind share on a number of fronts. That's all about to change, as the Redmond company attempts to make Vista more compelling to consumers.
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The quiet debut for Microsoftâs latest version of the Windows operating system reflects how the companyâs influence has faded as the nature of computer software has changed.
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Microsoft Corp. (MSFT.O: Quote, Profile, Research) , the world&#39;s largest software maker, on Thursday said its quarterly profit climbed as sales rose, but the company&#39;s revenue forecast
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Microsoft is quietly telling PC makers they can offer a Windows XP "downgrade" to customers buying systems preloaded with Vista.Image: Lenovo's XP 'downgrade' program
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Microsoft beat Wall Street expectations for both revenue and EPS (earnings per share) for its fiscal 2008 second quarter, attributing its strong quarter to sales of core client products, such as Windows Vista and Office 2007, as well as Exchange and SharePoint server software.For the quarter ended Dec. 31, Microsoft reported revenue of $16.37 billion, an increase of 30 percent year over year and a number that solidly beat the $15.95 billion in revenue that Thomson Financial analysts had estimated. Last year for the same period, Microsoft reported $12.54 billion in revenue.Diluted earnings per share were $0.50, an increase of 92 percent over the $0.27 in EPS reported last year, and $0.04 higher than Thomson Financial estimates of $0.46. Operating income for the quarter was $6.48 billion, an increase of 92 percent from the $3.47 billion reported for the same period last year.Microsoft&#39;s year-over-year percentage growth is higher than normal due to a deferral of $1.64 billion in revenue and operating income, as well as $0.11 of diluted earnings per share from the second to the third quarter of fiscal 2007. This deferred revenue contributed to the higher-than-average second-quarter percentage growth. Without these deferrals, second-quarter growth rates for revenue, operating income and earnings per share would be 15 percent, 27 percent and 32 percent, respectively, for the quarter reported Thursday.Ahead of Microsoft&#39;s announcement, analysts had expected the company to report a strong quarter even among economic uncertainty and fears that the U.S. economy is entering a recession.Microsoft&#39;s client business, on sales of Windows Vista, was especially strong in the quarter, with $4.34 billion in revenue compared to $2.59 billion in revenue a year ago. According to Microsoft, its client business has grown 20 percent on average since Windows Vista was made available nearly a year ago, and the company believes Vista began hitting its stride for adoption among customers and partners in the second quarter. According to Microsoft, it has sold more than 100 million licenses for Vista.Looking ahead to the next quarter, which ends March 31, Microsoft said Thursday that it expects revenue in the range of $14.3 billion to $14.6 billion; operating income in the range of $5.6 billion to $5.7 billion; and diluted earnings per share in the range of $0.43 to $0.45.For the full fiscal year ending June 30, Microsoft expects revenue in the range of $59.9 billion to $60.5 billion; operating income in the range of $24.2 billion to $24.4 billion; and diluted EPS in the range of $1.85 to $1.88.
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(InfoWorld) - Gartner Inc. analysts expect theÂ release of Windows Vista next year will have little effect on boosting PC sales. In a recent report on PC revenue, analysts for the research firm said they don't think Vista's release in early 2007 will do anything significant to affect the growth of PC sales, which they expect to be up 10.5 percent in 2006 over 2005. "While we think the [Vista] marketing campaign will attract people, we don't see enough there to attract a mass movement or a big growth spurt," said George Shiffler, a Gartner research director. "We don't think it will encourage enough people to replace [their PCs] right then and there." Moreover, he said PCs in general are not at the top of consumers' minds, particularly with the approaching Christmas holiday shopping season. Other consumer electronics may be a bigger lure, especially since Vista will fail to make its originally promised appearance on PCs before the holidays. "There are lots of things people can spend their money on," Shiffler said. "What are PCs going to have going for them? Vista's not going to be out." Microsoft originally promised to have Windows Vista on PCs by November, but in March pushed back its release to consumers until January 2007. Some analysts predict the OS will be out later than that, though online retailer Amazon.com Inc. has Jan. 30, 2007, as Vista's availability date in listings for presales of the OS. In lieu of Vista, Microsoft said Thursday it will have a new consumer electronics product on retail shelves in time for the holidays: its Zune digital music player. The product will allow users not only to play music, photos and videos on a three-inch screen, but also allow them to share files with friends via a wireless connection. This is unlike Apple Computer Inc.'s iPod, with which it is designed to compete. It also differs from the iPod by offering an FM radio tuner. In addition to the Zune player, Microsoft also will offer the Zune Marketplace, an iTunes-like service where users can purchase music tracks, and accessory packs for using the Zune player at home or in automobiles.ADVERTISEMENTMAKE SOA REAL WITH IBM WEBSPHERE PODCASTStreamline processes and maximize efficiency within a proven service oriented architecture. Take back control of your business processes with IBM WebSphere.
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After some initial market interest, sales of Microsoft's new Zune media player cooled off, but the company still predicts success.