Will Windows 7 sell PCs?

Leading analysts are making different predictions about the impact of Windows 7 on PC sales, and the reasons seem to boil down to the time frame considered, plus the perspective of the particular analyst.

"Windows 7, with its polished user interface and several new consumer-friendly features, will likely reduce the gap in perception between Windows and Mac OS," wrote Annette Jump, research director in Gartner’s Worldwide Client Computing Team," in a blog on the Gartner site.

But on the other hand, "Gartner does not expect that Windows 7’s release in October 2009 will have a major boost on worldwide PC sales in the fourth quarter of this year," according to Jump.

Quite conversely, Chris Whitmore, a hardware analyst for Deutsche Bank, wrote recently in a research note: "We expect Windows 7 to spark a multiyear upturn in PC unit growth."

Obviously, one of these analysts is saying "no," and the other "yes," on the question of whether Windows 7 will bring a leap in PC sales. Gartner’s Jump, though, is talking about the fourth quarter of this year, whereas the Deutsche Bank analyst — who was originally in a report — is referring to a multiyear time frame.

Whitmore, in fact, also appears to be thinking that a surge in sales won’t come immediately after Windows 7’s release. He goes on further in the research note to project that PC unit sales will pick up significantly a quarter or two after Microsoft has done new OS upgrades.

Steve Kleynhans, another Gartner analyst, got very specific about his own opinions on the question. "The effect of Windows 7 is going to come in two waves," predicts Kleynhans, a research VP at Gartner.

The first wave of Windows 7 sales will be driven by consumers, and the second one by business customers, according to Kleynhans. Both sales waves will be in turn impacted by economic factors, and these still remain iffy.

"We’ll see how Christmas does among the consumers," he says. Some households that want new Windows 7 PCs just won’t have enough money at hand to do so this holiday season, he suggests.

The business market, on the other hand, isn’t likely to see a boom in new PC sales until the end of 2010 or even the start of 2011, according to Kleynhans.

Although Windows 7 will play a key role, businesses will also be feeling a need to replace their PCs, something that many of them won’t have done for two-and-a-half years. "So Windows 7 is nicely timed," Kleynhans says.

But even then, the size of the sales boom will hinge on the state of recovery from the IT slowdown. Like consumers, businesses today don’t tend to have "hidden piggy banks" that will allow them to easily go out and buy new PCs, according to the Gartner analyst.

"Corporations might buy cheap PCs, and that isn’t necessarily a good idea," he observes.

In the Middle East, Steven Guggenheimer, Corporate VP, OEM at Microsoft is about beat that Windows 7 will boost system sales in the region.
Guggenheimer says given the interest and positive feedback generated in the region from businesses, channel partners and end-users that tested the product, it is safe to say that there will be big enterprises that will be early adopters of Windows 7.
Guggenheimer says Microsoft in the Middle East was able to work with enterprise companies such as Emirates Group and other organisations in the financial sector in the region. “The feedback from all the end-user clients that extensively tested Windows 7 in the region was encouraging,” he says. “We believe it is the early adopters and companies that are at the forefront of IT innovation that will help drive system sales in the Middle East.”
He says that as most enterprise organisations are still on Windows XP, the release and timing for Windows 7 is perfect as it coincides with the hardware upgrade cycles. “We will soon be seeing more PCs with Windows 7 rather than Windows Vista,” he says.
Guggenheimer says on the consumer side, netbooks have been performing very well in the Middle East and the fact that they can run Windows 7 is an added advantage for Microsoft. “IT purchasing decisions have be delayed or put on hold,” he observes. “As the global economy stabilises, we foresee a hardware refresh to garner momentum in the first half of next year,” he says.
Remarking on channel initiatives that Microsoft has been pushing prior to the launch of Windows 7 in the Gulf region, Guggenheimer says the company has worked extensively with solutions providers and system builders ensuring that they are well equipped to assist their clients with clear upgrade paths. “One of the key issues we addressed with our channel partners in the region is around volume licensing and upgrade paths from XP and Vista.”
Guggenheimer says although it is all systems go for Microsoft as it rallies behind its new desktop operating system, the size of the sales boom both in the consumer and commercial space will depend largely on the state of recovery from the global economic slowdown. Having said that, Guggenheimer says he is optimistic that the Middle East will come out of this slowdown a lot quicker than other regions around the globe.
Given the excitement and the thrust behind Windows 7, it will be interesting to see when systems sales will boom in the Middle East. Only time will tell the impact Windows 7 will have on system sales in the region.
While there is no denying that the first wave of Windows 7 sales will be driven by consumers, followed by business customers, ultimately the Windows 7 impact will largely be influenced by global economic factors, and these still remain uncertain.

Analysts are optimistic that the new Windows 7 OS will boost system sales — the question is when. RWME?s Manda Banda spoke to Steven Guggenheimer, Corporate VP, OEM at Microsoft to find out the motivation behind this optimism.

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