Vista Will Have Little Impact in 2007

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Gartner and IDC: Customers will eventually adopt Redmond's OS, but only when as refresh PCs, which could take years.

The release of Microsoft's Windows Vista operating system will have a limited impact on the number PCs shipped worldwide in 2007, according to a Gartner report released March 20.

The Gartner report is calling for worldwide PC shipments to grow 10.5 percent this year to a total of 255.7 million units. Meanwhile, revenue is slated to grow 4.6 percent to $213.7 billion.

For PC vendors, Gartner's analysts believe that emerging markets, such as India and China, will continue to increase in importance, while the interest in portable PCs, such as laptops, will continue to grow with both consumers and commercial users.

As for Vista, Gartner's analysts believe that both commercial and consumer users will eventually adopt Microsoft's new OS, but only when they decide to replace older PCs, which could take years.

In the meantime, a handful of consumers and SMBs (small and midsize businesses) will continue to adopt Vista, which will give PC vendors a limited boost in sales throughout 2007.

Click here to read the latest PC vendors rankings from Gartner and IDC.

"While Vista includes a number of interesting features, these features just don't have enough 'must have' appeal with the average home and SMB user to spark a significant rush of new PC sales," Mikako Kitagawa, a Gartner analyst, wrote in the report.

However, since most PCs for consumers and SMBs are now sold only with Vista and not Windows XP, this could help speed the adoption of the new operating system. Large enterprises, in the meantime, will wait to adopt Vista, while their IT managers continue to test the new OS before deploying it across their company's PCs, according to Gartner.

Gartner's view on Vista reflected a similar report released by IDC on March 20.

In that report, IDC analyst Doug Bell wrote that Vista could help boost sluggish desktops sales by year's end, but the OS' impact on that segment of the market will not last for long.

"The release of Vista and a desktop refresh will create some growth opportunity in late 2007 and early 2008, before resuming a declining growth trend in the out-years," Bell wrote in the IDC report.

In its analysis of the PC market, IDC found that worldwide PC shipments topped 227 million in 2006, a 9.5 percent growth compared to 2005, and sales grew 6.1 percent to $231.9 billion.

According to IDC, the number of PCs shipped worldwide should increase 11.1 percent in 2007, to a total of 252 million units.

In 2006, shipments of portable PCs, such as notebooks, increased 26 percent, according to IDC. Meanwhile, desktop shipments increased only 2 percent.

Click here to read more about how notebooks are overtaking desktops.

In recent quarterly reports, Hewlett-Packard and Dell, the world's largest PC vendors, reported that desktops sales had slowed considerably in the last half of 2006.

The IDC reports conclude that emerging markets—parts of Asia, Latin America, Canada, Central and Eastern Europe and Africa—could help offset some of the decline in desktops sales. In 2006, these markets represented 50 percent of the desktop market. By 2011, these areas will account for 50 percent of all PC shipments.

The Gartner report agreed that emerging markets have a lot to offer to PC vendors.

"Emerging markets and mobile PCs will continue to afford PC vendors their best opportunities for growth," George Shiffler, a Gartner analyst, wrote.

"However, falling average selling prices (ASPs), slowing replacement activity and further declines in mature market desk-based PC shipments will keep PC vendors under pressure to rationalize their operations or exit the market."

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