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Windows 7 tops Vista in early consumer sales by more than 200%

Aggressive pricing and relatively positive reviews are key factors. However, the discounts and specials may have may have crimped Microsoft's overall revenue from the product.

November 07, 2009|Alex Pham

It wasn't a high bar, but Windows 7 cleared it.

Consumer retail sales of Microsoft Corp.'s newest computer operating system topped those of Vista by 234% on a unit basis within the first few days of Windows 7's Oct. 22 launch, according to a report released Friday by market research company NPD Group. The report did not include sales to businesses and large organizations.

News that Windows 7 was outperforming Vista, the previous Windows OS version, in sales was not too surprising. The buzz for Windows 7 was relatively positive and largely void of the savage language that reviewers heaped on Vista when it was launched in January 2007.

This time, Microsoft also attempted to woo reluctant buyers with discounts and specials, such as a 50% discount on a copy of the software when buyers spring for a new PC, or a free upgrade from Vista for those who bought a PC after June 26.

"We definitely saw the results of aggressive pricing," said Stephen Baker, NPD's computer software analyst.

Though helpful in pushing volume, the discounts may have crimped Microsoft's revenue from the product. The NPD report was mum on the effect on Microsoft's top line.

It may be too early to say whether the software will help ignite sales of personal computers. With consumers making do with their old computers or opting for ultra-cheap netbooks, average PC prices have dropped about 20% since last year, Baker said.

Although unit sales of Windows 7 software were up in the first days of launch over those of Vista, sales of computers with Windows 7 were down 4% compared with sales of Vista-based computers when Vista launched.

But the comparison is not a fair one, Baker cautioned, because Vista launched in January, when PC sales tend to do better, and Windows 7 launched in October, one of the slowest months for PC sales.

Still, the slow economy may have helped Windows 7 sales in one respect, said Richard Shim, a PC analyst with the technology research company IDC.

"Usually upgrades are not very popular. People have tended to buy new PCs when new operating systems come out," Shim said.

"Windows 7 seems to be an exception," he said. "One reason is that it can work well with older computers because it's designed to be streamlined."

In other words, instead of spending $500 for a new computer, some consumers are spending the $120 to $220 for Windows 7 upgrades and souping up their old machines.

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alex.pham@latimes.com

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