Vista Sales Better Than Expected

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Microsoft (Quote) announced that early sales of Windows Vista are outpacing those that XP experienced, putting it on the road to become the
fastest-adopted version of Windows in the company’s history.

In the first month of general availability, sales of Vista exceeded 20
million licenses, which is more than double the initial pace of sales for
XP, which sold 17 million units in the first two months following its August 2001 release.

The numbers are for the period from Jan. 30 to Feb. 28, 2007, and
include Windows Vista licenses sold to PC manufacturers, copies of upgrades
and the full packaged product sold to retailers and upgrades offered through
the Windows Vista Express Upgrade program.

The sales figures are welcome, if somewhat belated, news for PC manufacturers, systems integrators, value-added
resellers and others in the PC-centric value chain who are hoping to dip
into the Vista gravy train, as well.

The company attributes the quick customer uptake to improved security
measures and interoperability with mobile devices and home entertainment
centers, said Brad Brooks, general manager of Microsoft Windows client
marketing, in a video made available
to reporters.

Merrill Lynch analyst Kash Rangan wrote in a note this morning that, while
business adoption of Vista is likely to be slower than consumer adoption, it
too is likely to outpace adoption of XP thanks to “features like integrated
search, enhanced security… better connectivity and ease of use.”

He also noted that security features in Vista could help Microsoft take a
significant bite out of software piracy, which he said represents 25 percent
of the worldwide PC market. “Vista makes piracy much harder and provides
greater differentiation for genuine customers,” he wrote.

Today’s news seems surprising, given that Microsoft CEO Steve Ballmer went
to great lengths in February to dampen expectations for the new release. “A new Windows release
is primarily a chance to sustain the revenue we have — it’s not necessarily
a new revenue growth opportunity,” he told financial analysts last month.

But during Microsoft’s January launch event, Ballmer predicted that Vista would get out of the gate quickly, saying that he expected Microsoft to sell twice as many units of Vista as Windows XP during the first three months of availability.

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