Microsoft Vista Sells 20M Copies in Feb.

Microsoft Corp. said Monday it sold 20 million consumer copies of the new Windows Vista operating system worldwide in February, but analysts said the data shed little light on the program's popularity during its first month on the market.

By comparison, Windows XP, Vista's predecessor, sold 17 million copies in the two months following its 2001 launch, Microsoft said.

"It's a stronger than expected start," Bill Mannion, a director of product marketing for Windows, said in an interview.

But given that the personal computer market has nearly doubled since XP launched, Vista sales "probably should be more," said Michael Silver, vice president of research at Gartner, a technology research group.

The analyst said 51 million PCs were sold to consumers worldwide in 2002; this year, the research group predicts 96 million consumers will buy a computer.

Starting in late October, PC makers included coupons for free or low-cost Vista upgrades that could be used once the software became available at the end of January. Microsoft's February sales total includes those promised upgrades, in addition to licenses ordered by PC makers to install on new computers, shrink-wrapped copies sold in retail stores and downloads from the Windows Marketplace Web store.

Silver estimates PC makers sold between 12 million and 15 million PCs with Windows XP Home Edition over the holidays -- a significant chunk of the 20 million total, depending on how many included Vista coupons.

While Microsoft wouldn't say how many Vista upgrades were ordered in that time frame, Dell Inc. spokesman Bob Kaufman said about two-thirds of its holiday PC shoppers registered for the upgrade.

"That would say that those (Vista sales) numbers aren't all that great if that includes all that backlog," said Silver.

Shipments of Vista to U.S. retailers in February lagged XP's first-month shipments by about 56 percent, according to the NPD Group, which tracks retail software sales.

Microsoft declined to break out the number of Vista copies sold at retail, though it has said in the past that 80 percent of Windows revenue comes from sales to PC makers.

The retail channel may not be the most important for Microsoft, but NPD analyst Chris Swenson said the decline is an indicator of consumer behavior overall.

"That's kind of a big deal," Swenson said. "Our thesis was, every review of Vista talks about how strenuous the hardware requirements of Vista were. I think customers got the message."

The analyst also said he thought Microsoft's advertising strategy, which he said was light on TV commercials, was partly to blame for the drop in retail sales.

"Microsoft should have more TV ads selling Vista than Apple has criticizing Vista," he said, referring to a popular series of Apple Inc. commercials that, among other things, portray the Vista upgrade as a grave surgical procedure.

Shares of Microsoft rose 20 cents to close at $28.22 on the Nasdaq Stock Market.


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