Will Windows 7 Reboot PC Sales?

Tagged: Windows 7, Software
Source: businessweek - Read the full article
Posted: 5 years 4 hours ago

For the first time in years, the PC market is starting to draw serious attention from Wall Street. Dell (DELL) shares surged after the company beat earnings expectations for the second quarter. The next day chip giant Intel (INTC) gave the sector another lift by raising its forecast for PC processor sales. Hopes are building among investors that the industry will see a revival in growth as Microsoft (MSFT) unveils its new operating system, Windows 7, on Oct. 22 to replace its troubled Windows Vista. "I think the uplift is going to be significant," says Brian Blair, an analyst with equity research firm Wedge Partners.

The question is how significant. Before Vista, a new Windows release could set off a corporate and consumer buying binge—not only for PCs, but also printers, mice, and software. Some analysts have pointed out that the Windows pop this time could be especially pronounced, since many people never bothered to buy Vista and some 600 million PCs are running the nine-year-old Windows XP.

But the tech bulls may be disappointed. Given the weak economy, PC unit sales are expected to rise 6.9% worldwide in the fourth quarter, according to research firm IDC. That would be the first quarter-over-quarter increase this year, but far short of the boost from releases such as Windows 95. "A lot of people are going to have to rethink their assumptions," says IDC analyst David Daoud. The firm expects PC sales to rise 6.1% in 2010.

Microsoft declined to comment for this story. But even the software giant has tried to tamp down expectations for the new operating system. "[The impact is] likely to be elongated over a couple of years, to be honest," Bill Koefoed, the company's investor relations chief, told shareholders in August.