If nothing else, a new operating system from Microsoft is a great excuse to get a new PC. The operating system will already be installed, and guaranteed to function by the hardware vendor, so there’s no need to try to upgrade an existing system. Having an upgrade that aborts halfway through the installation process, after wiping out the old system but before the new one is functional, is called the Blue Screen of Death. Meanwhile, Christmas is always another excuse to get a new PC.
But the delay of consumer Vista means there won’t be any new Vista PCs under the Christmas tree this season.
Meanwhile, those who would otherwise be interested in buying a PC for Christmas may not be inclined to get something that they know will become obsolete in a month, since that is what would happen if they went ahead and bought a Windows XP machine.
But according to major market research firm IDC, the delay of Vista will not have that big an impact on PC sales this Christmas because, basically, sales were not going to be great anyway. Recent healthy sales mean that there is not a big demand for replacement PCs, since so much of the installed base is relatively new.
Basically, after growth in 2004 and 2005 of 15 percent and 15.9 percent respectively, IDC expects growth in the worldwide PC market to slow to about 10 percent for 2006 and for the next several years. Lower prices mean that the growth in revenue will only be 5 percent. Europe will do slightly better than the rest of the world thanks to more gradual decline in growth and continued adoption of portables.
In fact, the big driver in the U.S. PC market is the on-going trend for consumers to replace their desktops with laptops, IDC said. Improved performance, longer battery life, and wider screens have more of an impact than the presence of absence of Vista, the firm indicated.
The research department of Lehman Brothers, a leading Wall Street broker, was less rosy about the impact of Vista’s delay. After the announcement of Vista’s delay, Lehman Brothers lowered its forecast for the global PC industry from a 12 percent growth rate for 2006 to 9.8 percent.
Because they won’t have the new operating system to lure them into the store, consumers are likely to delay getting a new PC at a rate of 10 to 20 percent, Lehman’s researchers predicted. The number of delayed PC purchases (with an average price of $915) would therefore range from 2.5 million to six million.
Consequently, HP and Dell, which respectively account for 16 and 17 percent of PC shipments, may feel some short-term pain, cautioned the researchers. But they and the other vendors are nevertheless likely to survive the joyless Christmas season and endure until January, or whenever Microsoft manages to get Vista out the door, and then recover.
Gartner was more interested in pointing out that there should be a lot of good deals on inexpensive PCs this Christmas season, since the vendors will have no other way to boost sales than by cutting prices.
As for corporate customers, the news about Vista was apparently just a big yawn. Gartner noted that most corporations take 18 months to ramp up to an operating system change. It takes that long for them to get versions of their applications that are compatible with the new system, test those applications, and plan the migration process. Therefore, wide-scale Vista deployments in large enterprises are not expected to start happening until 2008.
But Gartner also noted that corporate customers should spend their time between now and 2008 getting to know Vista. Serious testing, though, should not begin until the appearance of the ‘Beta 2’ release, expected this summer.
As for consumer Vista, the question that keeps coming up is whether this delay will be the one and only delay.
Microsoft being Microsoft, don’t count on it. And if Vista really will end the current flood of viruses and spyware, waiting longer than 10 extra weeks seems justified. Fortunately, Microsoft has another 11 months to play with before it disrupts the 2007 Christmas season.
Lamont Wood