March 21, 2006 5:05 PM PST

Vista delay could sting PC makers

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Everyone was asking the same question Tuesday: What does the Windows Vista delay mean for me?

Microsoft dropped a bomb late in the day, announcing it would push back widespread availability of the new operating system until January. The software company said the delay was being made for the benefit of computer makers, retailers and other partners, but many people took issue with Microsoft's assessment.

"This is not good for the whole industry," said Richard Doherty, an analyst at Envisioneering Group in Seaford, N.Y. "Not for peripherals makers, not for graphics makers, not for notebook makers and not for desktop makers. Everybody was counting on upgrades to Vista."

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Microsoft has said it doesn't expect the delay of Vista to dent fourth-quarter PC sales. However, Doherty and others disagreed.

"We essentially are giving up holiday 2006, and for notebook makers that is going to impact their bottom line quite a bit," Doherty said. "The first quarter is the slowest quarter of the year for any PC (sales)."

Rob Enderle, an analyst with the Enderle Group in San Jose, Calif., agreed that Microsoft's decision would be hard on computer makers. "The consumer market is largely a fourth-quarter market nowadays, and this will severely damage the market. There is no way around it," he said.

PC buyers won't be as eager to buy a new computer with Vista in January, Enderle predicted.

"A lot of the sales are permanently lost, not just deferred," Enderle said. "Consumers don't like shifting from fourth to first. It really does shift out buying behavior a year, and by that time the product is real old, so it won't have the same cachet."

Standing by
The PC industry, despite the abrupt change dealt to its holiday season plans, stood by Microsoft's decision in public statements.

"As Microsoft is one of HP's most valued and trusted partners, we support them in determining the most appropriate schedule for the Windows Vista launch. We continue to work together closely to ensure that we jointly deliver to customers the best total technology experience available, and look forward to an exciting postholiday launch of the new operating system," HP said in an e-mailed statement.

Dell, whose direct sales model might have allowed it to still get Vista on holiday machines, was a little more reserved. "We remain ready and excited to offer (Vista) when it is available," Dell said in a statement.

Listen up

During a Tuesday conference call, Windows chief Jim Allchin speaks to reporters and analysts about the Vista delay.

Download mp3 (3.7MB)

Gateway seemed almost relieved by the decision. "This allows us to prepare for the holidays in a more orderly fashion. And regardless of the actual timing, our PCs will be fully Vista-ready well in advance of Microsoft's introduction," a company representative said in a statement.

Chipmaker Intel declined to comment on the delay. Advanced Micro Devices had no public statement prepared when contacted by CNET News.com.

"Microsoft really dropped the ball on this one," said Sam Bhavnani, a principal analyst with Current Analysis, in an e-mail interview. "There are significant negative ripples that will be felt throughout the personal computer industry."

With the postponement, the next big retail push for Vista PCs will be six months or so after the holiday season, with back-to-school sales, Doherty said. "Now the first (selling) window becomes the educational window of the spring and summer of 2007," he said.

One question is the effect the delay will have on computer sales--whether consumers will buy now in the hopes of adding Vista later, or whether they will hold off to purchase a system with it loaded.

Doherty expects people will wait if they want Vista, rather than buying now and upgrading later. "Vista is very demanding on the

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7 comments

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surprised?
was anyone really surprised that it got pushd back again? They
have had delay after delay, cut after cut, for 3 years now. I dont
see why anyone would be surprised by this delay. Lets just see
how long it takes for Vista to come out now and how stripped
down it is. Watch as Gates allows Steve Jobs to have what will
probably be the best 4th quarter ever for Macs. Apple will have
their entire line over to Intel by then, be releasing ANOTHER OS
(thats 6 OS's in 7 years compared to M$ 2 in the same time
frame), and not to mention probably a new iPod and a new
version of their iLife and iWork suites. Good job mr. Gates on
dropping the ball yet again.
Posted by drumpat01 (37 comments )
Reply Link Flag
If ever there was a time to switch to OS X
It's now...
Posted by CentrOS (126 comments )
Link Flag
Bingo...
I agree 100%. Steve Jobs actually made some comment a while ago about the never arriving Microsoft OS. He seems to be correct. I find it somewhat ironic how Gates was mocking the $100 laptop last week, and then this week M$ is like, "Sorry, January of 07..." I find it funny that the reason is for "greater security," yet they are releasing the business versions on schedule. I like <emphasis>that</emphasis> "get the facts" :: cough cough:: campaign. "Buy our new OS early and get all the bugs!!!" Or maybe M$ is planting some viruses so that they can use their "anti-spyware" software built into Vista. Back to that mocking thing, Gates apparently was mocking the $100 laptop last week (aka One Laptop Per Child). Basically he had one reason to: the OLPC runs Red Hat Linux, meaning a decline in M$' monopoly. I was figuring that his company would be spot on until the release, but this is just an embarrassment for it. Maybe their monkey of a CEO has more tact, but any man who throws chairs around his office and tries to "f***ing kill competitors" is just a loonybin. Jobs is just growing his apple grove in Northern California.
Posted by CNerd2025 (98 comments )
Link Flag
Features
The only reason I use XP instead of 2k pro is greater support. I spend a great deal of time with every XP install turning it into essentially Windows 2000.

Most of the pretty eye candy in Vista (to me) will only mean taking more time to make it like Windows 2000.

It is a small price to pay for a clutter free GUI with instant responsiveness.

As much as I hate to admit it though, I am likely going to buy a new gaming PC and a (fresh) copy of Vista a few days after it goes on sale. The sole reason (at least at first) is so I can play Halo 2 on my PC.

I should be ashamed of myself :p
Posted by Dachi (797 comments )
Reply Link Flag
Releasing products in January
Putting things out in January instead of before the holiday season?
It seems to work darn well for Apple. Maybe it won't be as bad as
what the doomsayers say. But then, the two user bases are a little
different from each other.
Posted by tdowling (21 comments )
Reply Link Flag
Re: Releasing products in January
I would tend to agree with you.

Vista is going to require a new > $600 PC in most cases and is not really much of a gift idea for that reason. Besides, if somene gets a computer from me I would hate for them to get confused and think they should come to me for support for it.

My next (Vista) PC is going to be in the $2,000+ range.

If you know anyone that buys Christmas gifts like that who needs a friend, let me know.
Posted by Dachi (797 comments )
Link Flag
Computer Mfgs. Will Have To Heavily Discount
The Vista delay is bad news for computer manufacturers. They will have to heavily discount systems in the 4th quarter to entice new buyers to purchase an XP system. Consumers are not going to want to deal with trying to upgrade their computer to Vista once they have unboxed it. The only alternative is to take it to a place like CompUSA and have them do the upgrade, which will probably cost $100 and maybe another $50 - $100 for the Vista software. It's far easier to simply wait until January 07 to buy a new computer that has Vista pre-loaded.
Posted by Stating (869 comments )
Reply Link Flag
 

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