Vista retreats as XP sales hold up
Users stage last stand against unloved OS.
By Gregg Keizer, Computerworld | Computerworld UK | Published: 06:00, 23 July 2007
Microsoft expects Windows XP to make up a significantly larger part of sales than it had previously expected, at Vista's expense.
Chief financial officer Chris Liddell has told analysts that he expects XP to make up 22 percent of sales in Microsoft's new fiscal year, up from the previous estimate of 15 percent. Vista would make up the remaining 78 percent of Windows sales.
Windows XP sales will, in other words, be nearly 50 percent higher in the next 12 months than Microsoft had estimated earlier.
"We fine-tuned the Vista/XP mix for next year," Liddell said following the release of Microsoft's fiscal 2007 results on Thursday. "We changed it from 85 percent to 78 percent. Now, it's a lower number [for Vista], but it's still a very high number overall from our perspective, so 78 percent Vista mix in terms of sales next year."
According to Liddell, Microsoft will generate the same revenue, more or less, under the new mix, although there might be some slight differences because Vista sales have leant more towards higher-priced “premium” versions, than has XP.
His remarks caught the attention of Michael Cherry, analyst at Directions on Microsoft. "What that seems to say is that XP has stronger legs than you would expect after the release of a new operating system."
Clues that users aren't ready to ditch XP have not been hard to find. In April, for example, Dell retreated from its Vista-only position and said it would offer an XP option for its consumer PCs.
Three months before that, Microsoft extended support to Windows XP Home and XP Media Center to match Windows XP Professional's drop-dead date of April 2014.
"Most of the machines I see pitched in catalogues are in the $700 range, certainly under $1,000," said Cherry. "Computers with that amount of hardware are a better fit for XP. With Vista's requirements, people may be thinking about sticking with XP, and putting less money into the hardware."
It's possible, Cherry added, that Microsoft might find itself forced to recognise more reality in the future. "At some point, they might have to consider limiting the availability of XP," to push people to Vista.
The software developer has made at least one move in that direction already. In mid-April, it announced it would terminate sales of Windows XP to resellers and retail after January 2008. Users' reactions were almost unanimously negative.