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Retailers aim to get Vista boost

While there may be only a modicum of midnight madness, Vista's hefty hardware needs could offer an opportunity for services and add-ons.

Retailers are gearing up for next week's Vista launch, but it appears the "midnight madness" will be kept to a minimum.

CompUSA plans to keep its stores open past midnight on Tuesday, January 30, so shoppers can get the new operating system as soon as it goes on sale. Best Buy and Circuit City will each keep a handful of stores open late, but most of their stores and those of other retailers are planning normal hours.

That's a far cry from the epic August 1995 launch of Windows 95, when Microsoft managed to get people to line up for blocks to buy its latest release. But that doesn't mean retailers aren't counting on Vista. While the new operating system didn't arrive in time for last year's holiday shopping season, retailers are hoping something special in January might draw buyers at a time that is not.

"This is not going to be a Black Friday launch," said Circuit City Vice President Elliot Becker, referring to the day after Thanksgiving, traditionally the busiest shopping day of the year. "But I think it is still going to have a big impact in the market."

CompUSA, which is going the farthest by keeping all of its stores open late, said it wants to ensure it can offer enthusiasts a first crack at Vista.

"It's a once-in-five-years opportunity to have the (chance) for incremental business," said Carlos Fojo, senior director of technology services for CompUSA. "It also gives an opportunity to have an event, to drive extra awareness and extra sales."

Releases of new operating systems may not have quite the same appeal as in years past, but Microsoft has a couple of things going for it this time around. First of all, a new version of Office--Office 2007--is being released at the same time. Also, Vista is hitting store shelves at the same time it lands on new PCs. With Windows XP, the operating system started showing up on PCs in September 2001, while the formal retail launch didn't occur until October. Microsoft did start selling Vista and Office 2007 to large businesses in November.

Retailers will be doing their part. Many are keeping their offers close to the vest, but Circuit City's Becker said to expect plenty of cheap PCs and specials drawing people into stores. As is typical, those who buy the new products can anticipate other freebies as well.

"If you want to buy Windows Vista or Office there is a significant free package that goes along with it," Becker said, declining to offer specifics.

CompUSA said it is planning "doorbuster" deals on a variety of add-ons that go well with Vista, such as LCD screens, video cards, memory cards and hard drives.

Circuit City is hoping to tap some Super Bowl excitement by bringing NFL celebrities in to its stores to sign autographs. "It's going to be more like a party atmosphere," Becker said. "We're trying to make some excitement out of showing people what the new OS looks like."

Best Buy is trying to promote Vista throughout its stores, with displays not only in the computer section but also in areas like digital photography and home theaters, where the new operating system can also play a role, said spokesman Jeff Dudash. The company said it has trained 60,000 employees on Vista so workers in every department can help tout the OS's specialized capabilities.

"We're all pretty positive about what the Vista experience is like," Dudash said. "We think once customers better understand how Vista can change their lifestyle to a certain extent...they will be excited."

Online stores are also trying to get in on the act. Retailer is hoping to woo enthusiast buyers by offering a limited-edition version of Vista Ultimate Edition that's signed by Microsoft Chairman Bill Gates.

Microsoft itself is offering Vista online through its Windows Marketplace software site. That's not expected to be a major source of Windows sales this time around, but the company is clearly paying attention to studies that show the majority of consumer software purchases are projected to take place electronically within a few years.

Meanwhile, consumer support--both installing the operating system and upgrading machines to be more Vista-capable--represents a big opportunity for the major computer retailers. Best Buy, Circuit City and CompUSA are all promoting services in which they will put Vista onto existing PCs, as well as help get new Vista machines up and running.

"This is really something I think the retailers are banking on," said NPD analyst Chris Swenson. Best Buy's Geek Squad--comprised of technicians who do either in-store or in-home installations--may have an edge because of its well-known brand, Swenson said. "I think people are probably less familiar with the CompUSA and Firedog services."

Circuit City plans to discount its standard operating system installation service, though the company didn't release specific details. CompUSA, meanwhile, is offering a deal this week in which customers can drop off their PCs and pick them up next week with Vista installed, with only a $20 charge on top of the operating system purchase. It will charge $50 once Vista launches on January 30.

CompUSA is offering other Vista services, including a paid telephone service that lets customers buy 30 days of unlimited, 24/7 support for both Office and Vista for $29.95 and a PC trade-in program for those whose laptops can't easily be upgraded to Vista. Those who bring in a laptop that doesn't have the needed horsepower can get a store credit, typically from $150 to $500, toward a Vista-equipped PC or anything else.

The store is also offering a "Windows Vista Experience Guarantee" for consumers who buy the operating system and have it installed by CompUSA's technicians. If people are unhappy with Office or Vista, they can get their money back and have their old software re-installed free.

While Vista offers many opportunities for add-on services, Swenson said stores need to be careful how they price their Vista-related packages.

"If you charge too much for installation services, customers just go the hardware route," he said.

Another opportunity being eyed by stores and component makers is the ability to sell things like memory and faster graphics cards that can make a PC better able to run Vista.

"There's a lot of companies that are hoping to cash in on the more stringent technical requirements," Swenson said. But those hefty needs may also push people toward getting a new PC.

"I think a lot of people are going to go get a new machine if they want Vista," Swenson said. "But that's a big expense. For certain customers it will make sense to upgrade, especially if (they) have a new machine."

Microsoft has offered a software tool that enables customers to see just how much Vista their PC is capable of handling.

While many may find their old PC is not quite up to the task, analysts aren't seeing Vista dramatically alter computer sales patterns. "To say that every consumer is going to rush out and buy a new PC, I don't think that rings true," Swenson said.