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Microsoft: Windows 7 sales better than expected

November 25, 2009

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Early sales numbers suggest that Windows 7 could be better than initially expected. At least that's what Microsoft CEO Steve Ballmer offered at the company's annual shareholders meeting last week, saying that the company has already sold twice as many units of Windows 7 than any other operating system ever launched in a comparable time.

Ballmer's words follow NPD Group's report that sales of Windows 7 boxed software vastly surpassed those of its predecessor, Vista, for the first three days following its release.

Net-Applications also reported that Windows 7 marketshare rose to a little over 3.6 percent within two weeks of its launch, from the 1.99 percent it had when Microsoft rolled the product out on Oct. 22.

Ballmer also clearly wanted to send the message that Windows 7 has the momentum to become a huge success, said Michael Cherry, an analyst with Directions on Microsoft.

But do the early numbers indicate that Windows 7 may be strong enough to cheer the shareholders of other companies such as Dell and HP?

For its part, Michael Dell seems to think so. Dell posted a 54 percent drop in profit for the third quarter. Its net income was US $337 million, or 17 cents per share, down from $727 million, or 37 cents per share, in the same 2008 period.

Despite the steep drop, Dell maintained an upbeat tone about his company's prospects, in part based at least on the expectation that Windows 7 will goose sales.

Nevertheless, Dell said the PC and server manufacturer is seeing overall improvement in IT demand, and that Windows 7 is being very well received by consumers and businesses, noting that "we'll see the benefits of that more fully in our fiscal Q4."

About 59 percent of the Windows installed base intend to deploy Windows 7 within the first year, an ITIC survey found.

Dell also does have good reason for optimism, despite its disappointing financial results, said Laura DiDio, principal of ITIC. "They do have good products. They are a also big OEM reseller of Windows 7," she said.

So Dell could be a prime beneficiary of the pent-up business demand for upgraded systems.

Whether the corporate sector will deploy Windows 7 en masse is still uncertain however, suggested Microsoft's Cherry.

"Unlike Vista, I think they are open to it but I also think with the economy continuing the way it is, we will see more phased rollouts than wholesale adoption."

Recently, Dell has been working closely with Microsoft to ready a range of new products for Windows 7 across several different buying categories, from high-end enterprise products such as the Dell Precision T-7500 workstation, to low-cost consumer offerings such as the new 10-inch Inspiron Mini 10 netbook.

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Source: Microsoft.