News

Windows 7: Expect 'Modest' Bump in PC Sales, Veghte Says

• By Kurt Mackie
• 06/08/2009

Microsoft's Bill Veghte spoke at the UBS Global Technology and Services Conference on Monday, providing a general overview of the Windows 7 business plan.

Veghte, who is Microsoft's senior vice president of the Online Services and Windows Business Group, described the coming Windows 7 product line but he did not reveal any pricing figures, which is Microsoft's next step before releasing the operating system into general availability. Pricing is also a big question among the investment analyst crowd at the conference.

In general, Microsoft sets Windows prices based on developed markets and emerging markets. Those segments are further broken down into enterprise, small-to-medium business and consumer markets. The products are differentiated based on a "good, better, best" experience, Veghte explained.

At the low end, Windows 7 Starter edition will be available as an entry-level original equipment manufacturer offering that's only for netbook-class PCs, Veghte said. Microsoft is planning about six Windows 7 editions, which the company outlined in February.

Veghte offered little hope for those expecting Windows 7 to push new PC sales in the current slumping economy. While he said Microsoft was "incredibly optimistic" about Windows 7, the company expects the bump in new PC sales to be "modest." Veghte added that he's found enthusiasm among CIOs and IT professionals for Windows 7, but his personal opinion is that it will get "drowned by the macro-environment" of the current economic downturn.

Veghte dampened hopes for retail upgrades, telling the crowd that "I worry that some of you have large numbers for that upgrade opportunity." Most OS upgrades will happen as people buy new PCs, he added, and it'll be seen more on the consumer side.

Veghte was asked about Microsoft's plans for working with the ARM chip in netbooks, which are small, low-cost laptop-like devices. He didn't answer the question. Microsoft has worked with ARM in the past, but principally with Windows Embedded CE and Windows Mobile.

Microsoft currently provides Windows XP Home edition for netbooks, where it has gained a "more than 90 percent attach rate," Veghte said. Most of those netbooks use Intel's Atom processor. However, it's thought that the ARM processor could show promise due to its greater power savings. ARM processors could be used in netbook-like mobile devices, and that could pose a potential challenge to the current Wintel netbook market lock.

Microsoft is currently going through an experimental period with netbooks, Veghte said, and the company will "compete vigorously." However, Microsoft sees the world in terms of PCs and phones. For those who want something extremely mobile, there are smartphone devices, he said.

In response to a question, Veghte emphasized that the PC isn't being supplanted by the World Wide Web. It's an "and" opportunity -- not "or," he said. The tie-in for Microsoft is Windows Live, which is a collection of Microsoft's online services. Windows Live is a "key vehicle for connecting the PC and Web," he explained.

Microsoft has previously announced that Windows 7 will ship on Oct. 22. To encourage sales, Microsoft allegedly will start a "technology guarantee program" promising Vista buyers a free upgrade to Windows 7, which will begin on June 26, according to leaked information. However, Veghte did not mention or confirm the program's existence in his talk.