C
Chad Harris
February 16, 2007
Microsoft Plays Down a Sales Lift From Vista
By JOHN MARKOFF
http://www.nytimes.com/2007/02/16/business/16soft.html?_r=1&oref=slogin&pagewanted=print
SAN FRANCISCO, Feb. 15 - Wall Street analysts are being too optimistic about
sales of Windows Vista, Steven A. Ballmer, Microsoft's chief executive, told
financial analysts in New York on Thursday.
Vista, the latest version of the Windows operating system, was released to
corporate customers late last year and to retail customers last month.
Analysts have said industry growth was slowed by repeated delays in Vista's
introduction.
But Mr. Ballmer suggested that Vista's release would generate only a "small
surge" in PC sales. He said forecasts for sales in the fiscal year beginning
in July were too high, noting that the analysts' spreadsheet models called
for strong growth in Vista sales, while at the same time predicting slower
growth for the rest of the personal computer industry.
"These things are out of whack," he said at an analyst conference that was
broadcast on the Internet. "If Vista is growing, there should be a lot of
people participating," he said, referring to other companies in the PC
industry.
Mr. Ballmer suggested that PC industry growth would not reach the 12 to 15
percent annual rates that some analysts have been predicting.
Mr. Ballmer's comments also suggest that customers will not rush to upgrade
existing machines to the new software, which is reported to be both
memory-hungry and less compatible with existing software and hardware than
Microsoft had indicated.
At the same time, Mr. Ballmer said he was optimistic about the role that the
new Windows software would play in the company's profit growth, in the long
run. He listed Windows as the company's leading growth business in a list of
nine that could potentially create more than a half-billion dollars in
profit growth during the next three years.
Mr. Ballmer spoke after the stock market closed. Microsoft stock fell about
1.7 percent in after-hours trading, to $28.95.
During his hourlong presentation, Mr. Ballmer reiterated that the company's
business strategy called for patience and persistence, even in businesses
where the company does not find success over a long period of time. He noted
that for the first 13 years after the company began selling corporate server
software in 1989, it was told that its products were not reliable enough for
that market.
He acknowledged that Microsoft was trailing both Google and Yahoo in the Web
portal and search markets, which are supported by online advertising, and
said the company was unhappy being in a trailing position.
"We need a strong services platform," he said, pointing to the
infrastructure the company is now building under its Live brand in a
development effort being led by its chief technology officer, Ray Ozzie.
Microsoft Plays Down a Sales Lift From Vista
By JOHN MARKOFF
http://www.nytimes.com/2007/02/16/business/16soft.html?_r=1&oref=slogin&pagewanted=print
SAN FRANCISCO, Feb. 15 - Wall Street analysts are being too optimistic about
sales of Windows Vista, Steven A. Ballmer, Microsoft's chief executive, told
financial analysts in New York on Thursday.
Vista, the latest version of the Windows operating system, was released to
corporate customers late last year and to retail customers last month.
Analysts have said industry growth was slowed by repeated delays in Vista's
introduction.
But Mr. Ballmer suggested that Vista's release would generate only a "small
surge" in PC sales. He said forecasts for sales in the fiscal year beginning
in July were too high, noting that the analysts' spreadsheet models called
for strong growth in Vista sales, while at the same time predicting slower
growth for the rest of the personal computer industry.
"These things are out of whack," he said at an analyst conference that was
broadcast on the Internet. "If Vista is growing, there should be a lot of
people participating," he said, referring to other companies in the PC
industry.
Mr. Ballmer suggested that PC industry growth would not reach the 12 to 15
percent annual rates that some analysts have been predicting.
Mr. Ballmer's comments also suggest that customers will not rush to upgrade
existing machines to the new software, which is reported to be both
memory-hungry and less compatible with existing software and hardware than
Microsoft had indicated.
At the same time, Mr. Ballmer said he was optimistic about the role that the
new Windows software would play in the company's profit growth, in the long
run. He listed Windows as the company's leading growth business in a list of
nine that could potentially create more than a half-billion dollars in
profit growth during the next three years.
Mr. Ballmer spoke after the stock market closed. Microsoft stock fell about
1.7 percent in after-hours trading, to $28.95.
During his hourlong presentation, Mr. Ballmer reiterated that the company's
business strategy called for patience and persistence, even in businesses
where the company does not find success over a long period of time. He noted
that for the first 13 years after the company began selling corporate server
software in 1989, it was told that its products were not reliable enough for
that market.
He acknowledged that Microsoft was trailing both Google and Yahoo in the Web
portal and search markets, which are supported by online advertising, and
said the company was unhappy being in a trailing position.
"We need a strong services platform," he said, pointing to the
infrastructure the company is now building under its Live brand in a
development effort being led by its chief technology officer, Ray Ozzie.