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Expectations lowered for Windows 95

Dataquest is downgrading its expectations for Windows 95 sales in 1996, saying that many corporate buyers are reluctant to upgrade from Windows 3.x.

Market research firm Dataquest is downgrading its expectations for Windows 95 sales in 1996, saying that many corporate buyers appear to have changed their minds about upgrading from Windows 3.x.

According to a just-released report, Windows 95 will still be the most prevalent system on desktop PCs, but Dataquest has lowered its sales forecast by 27 percent. They now expect Microsoft to ship 45.7 million copies of Windows 95 this year.

Dataquest originally forecast that Microsoft would ship less than 10 million copies of Windows 3.x in 1996. But unexpectedly strong demand for Windows 3.x has forced a revision of those estimates: Dataquest is now predicting shipments of Windows 3.x will total about 20.9 million. That's more than 10.9 million copies of Windows 95 that aren't getting sold.

Chris LeTocq, principal analyst of Dataquest's personal computing software program, believes that Microsoft may have done too good a job of selling people on the benefits of Windows NT 4.0, a new version of the company's higher-end operating system that now boasts the same interface as Windows 95 but is more secure and crash-proof. Instead of buying machines with Windows 95, large- and medium-sized companies have continued to buy Windows 3.x, possibly waiting for NT 4.0 that just shipped to hardware manufacturers last week.

Information systems managers had initially indicated they would upgrade from 3.1x systems to Windows 95. "But when we looked at the numbers back from the hardware vendors for the first half, it was clear they had changed their minds," LeTocq said.

The news isn't all that disappointing for Microsoft, however. Sales of Windows NT server licenses are stronger than expected, with predicted shipments of 550,000 units compared to predicted shipments of 606,000 units for Novell's NetWare, which has typically dominated the market.

LeTocq added that the systems shipping with Windows 3.x have sufficient resources to run either Windows 95 and NT, so Microsoft may get a wave of upgrade requests yet for one of its two operating systems. The company earns royalties no matter what, whether new users choose to upgrade to Windows 95 or NT.

"We call it the shotgun approach. If they don't get you with one barrel, they'll get you with the other," LeTocq said.