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NPD: Early Office 2010 sales 'disappointing'

Early numbers show lackluster sales for Microsoft's Office 2010--at least when compared to its predecessor. Why? Bad timing, not enough features.

NPD and MS Office 2010 logos

Stephen Baker, NPD Group's vice president of industry analytics, on Tuesday called the first two weeks of sales for Microsoft's Office 2010 product "a bit disappointing."

The group's findings, which stem from its Weekly Tracking Service, were posted to NPD's company blog on Tuesday, and show that both the number of units sold and the money made from Office 2010 are less than they were for the first two weeks of sales for Office 2007. However, the findings also show that Microsoft is "in line, and in fact slightly ahead of" the expected 2010 calendar year sales trends for Office 2007.

According to Baker, a big part of the problem lies in the fact that current Office 2007 users don't have as much of a reason to upgrade as they did in the past. "Office 2007 was a radical new design that certainly helped deliver a lot of curious buyers and it was launched nearly parallel with Vista, adding a good deal of promotional activity in the software aisle, both of which likely helped drive initial sales of Office 2007," Baker said. Baker also pointed to the difference in release timing, as Office 2007 was released in time for the busy holiday shopping season, whereas the 2010 edition came in the slower summer months.

Interestingly enough, Baker dismissed online office suites like Google Docs, Zoho, and ThinkFree, as well as free office software like OpenOffice stealing market share away from Microsoft. "These products have little awareness among the mainstream consumer who is the retail boxed version's primary customer," Baker said. "Over time it is certainly likely that we will see some slowdown in retail sales as consumers alter their productivity software habits, but that time is not now." Instead, Baker pointed to Microsoft's frequent development cycle as the problem, saying that there were plenty of functional copies of previous years of Office out in the wild, giving people little reason to spend again.

Baker did point to some good news for Microsoft though, in the form of its key card licensing program, which eschews a retail box in place of a credit card-sized license key that can be used to activate the versions of Office 2010 that come pre-installed on new PCs. According to NPD, a third of Office 2010 units have come from this new sales method--a number Baker says could grow even more if Microsoft decided to offer it on machines where the soon-to-be-phased-out Microsoft Works office suitestill exists.