Monday, August 20, 2007

Acer Disappointed by Slow Vista Uptake

While Microsoft launched an early holiday push this week to encourage consumers to purchase Vista-enabled products from Dell, HP, Sony, and Toshiba, PCs from Acer are notably absent from the software giant's product promotions, likely due to Acer's president, Gianfranco Lanci, saying that the industry is disappointed with Vista.

The president of Acer told the Financial Times Deutschland this week that he thinks Microsoft Relevant Products/Services's newest operating system, Windows Vista, gives PC users little reason to upgrade.

"The whole industry is disappointed with Windows Vista," Gianfranco Lanci told the newspaper, while indicating that the new system's stability continues to be a worrisome problem. The president of the world's No. 4 PC-maker also suggested that Vista's current low adoption rates invite a discussion concerning possible alternatives.

"I do not really think that someone will buy a new PC right now because of Vista," Lanci said. "And that will not change in the second half of the year."

Style over Substance?

Microsoft launched an early holiday push this week to encourage consumers to purchase Vista-enabled products from Dell, HP, Sony, and Toshiba. By contrast, PCs from Acer are notably absent from the software giant's product promotions for this year's holiday season.

In particular, Microsoft applauded the aesthetics of PC products such as Dell's new Inspiron 1720 notebook PC, which features "personalized hues from midnight blue to crimson red, and pearl white to flamingo pink or spring green."

But in stressing style, is Microsoft drawing attention to Vista's apparent lack of a compelling killer app? "For home users, I'm not sure they know why they would want to upgrade," said Gartner Relevant Products/Services Client Computing research vice president Michael Silver. "Either the benefits are not there or Microsoft has not clearly communicated what they are."

Silver said that, for enterprises, he does not see Microsoft's Vista push to be significantly different from the one the company went through to get to Windows 2000. "For both enterprises and consumers, the benefits now are a bit more questionable, simply because Windows XP is a very good OS, as compared to the predecessors to Windows 2000, which had many issues," Silver explained.

Slow Adoption Not Surprising

During the company's earnings conference call with financial analysts last week, Microsoft said its OEM licensing grew by 11 percent in the year's second quarter, driven by demand for Vista. Moreover, CFO Chris Liddell said he sees PC growth ranging from 9 percent to 11 percent in the fiscal year ahead, with the company's client division -- to which Vista sales are posted -- poised to match anticipated market growth, step for step.

Following the conference call, two Wall Street financial analysts released client notes stating that Vista's adoption had been lower than they had expected, given that PC shipments had grown by roughly 12 percent during the second quarter, according to both Gartner and IDC.

Still, Silver said he does not find it surprising that Vista adoption has been slow thus far because it takes companies a good 12 to 18 months of testing and planning before they can bring in a new OS. "Also, the nature of the Internet has changed since 2001 and Windows XP, and there are many more venues for negative opinions to be circulated," Silver noted. "Windows Vista is likely suffering from this phenomenon."

Windows 7 in the Wings

Despite Vista's recent introduction, Microsoft is already talking about having its next-generation OS, known simply as Windows 7, ready to go in three years. "In terms of Windows 7, there's always something new around the corner," Silver noted.

Enterprises should not try to skip Windows Vista, advised Silver. "It increases the risk because Windows XP will be pretty old by 2011." Even if Microsoft is on time with a new release, he said, companies can't adopt that OS for 12 to 18 months after it ships.

Given all the work involved in upgrading from one OS to the next, is it likely that many PC users will simply stick with XP until the next OS rolls around? Microsoft has a pretty clear support timeline, Silver said. "They could come out with new features for Vista that they don't make available for XP, but it's pretty hard for them to reduce the XP support time."