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Vista not selling as well as XP

News on the retail front is brighter for Office 2007, which was released to stores the same day as Vista.

Office sales from January to June were roughly double those of Office 2003 during its first six months on the market and up by 60 per cent from Office sales for the first six months of last year. (Sales of Office 2003 at retail continued to grow over the life of the product.)

Of note, Swenson said just over 20 per cent of all boxed copies of Office were Office for Mac. Swenson credited the large number of people switching to Macs as part of the reason for the spike in Mac Office sales.

"If I buy a new PC I can reuse old Windows software," Swenson said. But, if someone is switching from a PC to a Mac and wants Office, he said, "you have to buy new software."

NPD's data comes from its monthly sales reports of software sold at major retailers including Best Buy, CompUSA, Target and Apple's retail stores. It also includes e-commerce sites such as Amazon.com, Buy.com and BestBuy.com.

As for why Vista sales are down, Swenson said it is probably due to a number of factors. More stringent hardware requirements mean that more buyers who want Vista decide to get a new PC, particularly as computer prices have come down so steeply compared with XP's early days. Also, he said, Microsoft has done less advertising than it did with XP.

"The problem is that there are a lot of complex new features in Vista, and you need to educate consumers about them," Swenson said. "Much like Apple educating the masses about the possibilities of the iPhone, or focusing on a single feature or benefit of the Mac OS in the Mac vs. PC commercials, Microsoft should be educating the masses about the various new features in a heavy rotation of Vista in TV, radio and print ads. But the volume of ads has paled in comparison to the ads run for XP."

Just because boxed Vista sales are down doesn't mean they won't pick up, he added. He noted that XP sales peaked a few years after its 2001 launch.

"My hypothesis is that there were a lot of people that bought PCs running 2000 or ME before the XP launch, and thus when they decided to upgrade they opted for the XP upgrade a while after their initial purchase," Swenson said. "There is a possibility that we might see a similar trend with Vista."

But given the fact that only relatively new PCs can be upgraded to Vista, and with standalone sales not showing signs of improving, Swenson said, "it's looking less and less likely that this will happen."