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3/27/2006
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Report: Vista Delay Won't Impact PC Sales Much

PC shipments are still expected to grow at slightly more than 10% a year over the next several years, an IDC report said Monday.

Microsoft's delay of its Windows Vista operating system won't affect PC shipments, which are expected to grow at slightly more then 10 percent a year over the next several years, according to a report released Monday by IDC.

And, while the delay in Vista for its mainstream consumer business is expected to negatively impact sales around the holiday season, Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker, said he expects PC manufacturers and retailers to introduce offers and promotions to help stimulate sales.

"I suspect they will come out with some offers -- maybe free upgrades for Vista," said Loverde in an interview. "They aren't going to let the fourth quarter marketing opportunity [get away.]"

The market research firm said it expects PC shipments, which had been growing 15 percent annually over the past two years, to slow to 10 percent while actual value of the shipments are likely to weigh in under 5 percent.

"Some consumers will certainly delay PC purchases until Vista is available, but we expect the delay to shift only moderate volume from the fourth quarter of 2006 into 2007 and will not cause a loss of sales," Loverde said. "The timing of the release will have some impact on when consumers buy, but not so much on whether or not they buy."

A Lehman Brothers Inc. report released last week predicted that PC shipments would suffer in the wake of Vista's delay.

At least one chip executive forsees the new operating system driving NAND flash memory sales in the PC, rapidly increasing demand for the non-volatile memory.

Asked if he detects a PC Holy Grail in the form of a "killer ap" that could boom sales, Loverde said he hasn't sighted any, but he and colleague Richard Shim, senior research analyst of Personal Computing at IDC, note that ongoing PC improvements taken together help spur new sales. They cited improving display and battery technology for portables as well as faster clock speeds and even improved voice recognition technology as helping sales.

Loverde doubts Microsoft's delay of its Office 2007 will have much impact on PC sales either, although he said he imagines some users who like factory-installed software will hold out for the availability of Office 2007 next January.

As for the U.S. market, Shim, in a statement Shim: "The prevailing wind driving U. S. PC market growth continues to be consumers and the passage of desktops to portables as their dominant computing platform."

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