October 29, 2007 4:00 AM PDT
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Clearly, though, those consumers opting to go to Windows XP are in the minority. Vista is now on 95 percent of the desktops on retail shelves and Vista-based laptops represent 91 percent of the models in retail aisles, Charney said, citing numbers from Current Analysis.
Strong Vista sales, whether due to Vista's popularity or just a strong PC market, are nonetheless important to the operating system's future. That's because as Vista's installed base grows, application developers and hardware makers will be more likely to create products that specifically take advantage of the new operating system, which in turn, becomes a further catalyst for sales.
Microsoft isn't mounting a massive ad campaign for Vista this holiday season, but said to expect strong marketing from key partners like Hewlett-Packard. The software maker has also kicked off an online marketing campaign touting the benefits of combining Windows Vista with Microsoft's Windows Live services, the most significant melding of the operating system and online businesses to date.
The software maker is counting on the upcoming holiday season--the industry's biggest selling period--to substantially boost the number of Vista machines out in the world. Apple's Macintosh does represent a formidable competitor for consumer sales, having gained significant market share at Windows' expense in the past year. And while this is the first holiday season for Vista, it's been on shelves for nine months, as compared with Apple's Mac OS X Leopard, which made its debut on Friday.
Microsoft said it isn't deterred by Apple's gains, noting Microsoft's own growth and saying that the overall market is expanding as consumers understand all of the things PCs can do as part of the digital life.
"We're excited and our partners are excited about the opportunity for Windows Vista coming up this holiday," Charney said.
While Apple has gained on Windows over the past year, Bhavnani said the company may find further gains tougher to come by unless it offers a major redesign of its products or comes up with a lower-priced laptop.
But Microsoft may also run into challenges from growing economic uncertainty. Earlier in the year, Bhavnani said he had a more bullish forecast for holiday PC sales.
"Concern about a recession probably weighs on the hearts and minds of some of the consumers," he said. "It's going to be a very good holiday, for notebooks especially. But it's not going to be a great holiday season."
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