XP Popularity Prompts Longer Availability

Vista sales and its financial performance appear strong, but Microsoft is nevertheless extending Windows XP’s availability. While consumers are adopting Vista with little complaint, business customers are more conservative and continue to order XP more than Vista from OEMs. In response, Microsoft has extended XP’s availability through several channels, and other measures may be required as well, such as a clearer roadmap for Microsoft’s client OS that could spur upgrades among business customers. In addition, other product groups will need to include XP in their development plans for years to come, and slow adoption will reduce Vista’s impact on Microsoft’s competitors.

Mixed Signals on Vista

In the quarter ending Sept. 30, 2007, revenue for the Windows desktop OS showed strong growth—25% over the comparable quarter a year ago—driven largely by stronger PC sales and a mix shift to higher-priced editions of the product (mainly Vista Home Premium, a consumer version of the OS).

Microsoft has also cited strong sales of Vista to volume customers, stating that by Sept. 30, 2007, eight months after its release, 42 million enterprise desktops were licensed for the product.