Vista delay could sting PC makers

The postponed launch of the Windows update looks bad for the whole computer industry, analysts say.

Everyone was asking the same question Tuesday: What does the Windows Vista delay mean for me?

Microsoft dropped a bomb late in the day, announcing it would push back widespread availability of the new operating system until January. The software company said the delay was being made for the benefit of computer makers, retailers and other partners, but many people took issue with Microsoft's assessment.

"This is not good for the whole industry," said Richard Doherty, an analyst at Envisioneering Group in Seaford, N.Y. "Not for peripherals makers, not for graphics makers, not for notebook makers and not for desktop makers. Everybody was counting on upgrades to Vista."

Microsoft has said it doesn't expect the delay of Vista to dent fourth-quarter PC sales. However, Doherty and others disagreed.

"We essentially are giving up holiday 2006, and for notebook makers that is going to impact their bottom line quite a bit," Doherty said. "The first quarter is the slowest quarter of the year for any PC (sales)."

Rob Enderle, an analyst with the Enderle Group in San Jose, Calif., agreed that Microsoft's decision would be hard on computer makers. "The consumer market is largely a fourth-quarter market nowadays, and this will severely damage the market. There is no way around it," he said.

PC buyers won't be as eager to buy a new computer with Vista in January, Enderle predicted.

"A lot of the sales are permanently lost, not just deferred," Enderle said. "Consumers don't like shifting from fourth to first. It really does shift out buying behavior a year, and by that time the product is real old, so it won't have the same cachet."

Standing by
The PC industry, despite the abrupt change dealt to its holiday season plans, stood by Microsoft's decision in public statements.

"As Microsoft is one of HP's most valued and trusted partners, we support them in determining the most appropriate schedule for the Windows Vista launch. We continue to work together closely to ensure that we jointly deliver to customers the best total technology experience available, and look forward to an exciting postholiday launch of the new operating system," HP said in an e-mailed statement.

Dell, whose direct sales model might have allowed it to still get Vista on holiday machines, was a little more reserved. "We remain ready and excited to offer (Vista) when it is available," Dell said in a statement.

Listen up

During a Tuesday conference call, Windows chief Jim Allchin speaks to reporters and analysts about the Vista delay.

Download mp3 (3.7MB)

Gateway seemed almost relieved by the decision. "This allows us to prepare for the holidays in a more orderly fashion. And regardless of the actual timing, our PCs will be fully Vista-ready well in advance of Microsoft's introduction," a company representative said in a statement.

Chipmaker Intel declined to comment on the delay. Advanced Micro Devices had no public statement prepared when contacted by CNET

"Microsoft really dropped the ball on this one," said Sam Bhavnani, a principal analyst with Current Analysis, in an e-mail interview. "There are significant negative ripples that will be felt throughout the personal computer industry."

With the postponement, the next big retail push for Vista PCs will be six months or so after the holiday season, with back-to-school sales, Doherty said. "Now the first (selling) window becomes the educational window of the spring and summer of 2007," he said.

One question is the effect the delay will have on computer sales--whether consumers will buy now in the hopes of adding Vista later, or whether they will hold off to purchase a system with it loaded.

Doherty expects people will wait if they want Vista, rather than buying now and upgrading later. "Vista is very demanding on the

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