On Jan 30, 10:30 am, Doug Mentohl <doug_ment...@xxxxxxxxxxxxx> wrote:
> Microsoft founder Bill Gates has told the BBC that it could take as much
> as four years for economies in trouble to return to positive growth.
> http://news.bbc.co.uk/1/hi/business/davos/7860708.stm
Perhaps this is because he knows that Windows 7, if it comes out in
2010, won't actually start generating serious revenue until 2012,
almost 4 years from now.
Keep in mind that Microsoft stock is widely held by pension funds,
mutual funds, retirement funds, and other investments normally
intended to provide income and growth of the principle so that current
and future obligations can be paid in the future.
Microsoft clearly got caught flat-footed when Vista sales (that
weren't actually XP sales being counted as Vista sales) fell WAY below
expectations. The problem is that because Microsoft had put all it's
eggs in the Vista basket, corporate customers decided to terminate or
lapse their support contracts, paying a nominal "buy-out" fee to get
permanent licenses that could be transferred to any computer used by
an employee of the company, or used only on company premises. What
they actually got was a count of licenses, typically 20% more than the
number of total employees, and as much as 70% more than the number of
employees who actually used computers.
Last year it was a nice little wind-fall and fluffed up Microsoft's
revenues. Microsoft was even able to report them as "Vista" sales,
since the licenses were sold as Vista licenses that could be
downgraded to XP or Windows 2000.
Now that windfall money is gone, and they can't even push any more
stale Vista licenses into the pipe. PC sales have been so slow and
prices so low that most OEMs are demanding substantial or full credit
for unused licenses from the previous year. I wouldn't be surprised
if some OEMS have enough surplus licenses to actually be able to go a
year without ordering ANY additional licenses.
There are other "Tells" that let the OEMs know that Windows or Vista
or Steer or whatever Microsoft wants to call it, isn't doing as well
as Microsoft might think. When people don't buy any additional
windows software, especially Office, it's an indicator that the buyer
might be installing something else. When they don't buy extended
warrantees, or only buy short-term replacement contracts - it usually
indicates that they will be installing something else - since the
Warranty only offers Windows support.
When the OEMs see these types of indicators, that's a pretty good sign
that Vista is not a substantial "hot button" in their choice to
purchase that computer. Some OEMs, like Dell also offer installation
media kits, so that you can install previous versions of Windows.
Finally, when machines that ONLY support Windows and Vista sit on the
shelves and ROT, dropping in price every week, until the Retailer has
to clear them out at below cost to avoid inventory taxes, and tells
the OEM they will never order more of those, it's a pretty good
indicator that Vista is not an asset to the sale.
When 2 of the largest PC retailers close all, or nearly all of their
stores, and can't pay for the inventory they've ordered. That's a
pretty good sign that Vista is not a big asset to the PC sales.
When other Retailers shut off all the PCs on the sales floor, rather
than take the only PC they are selling for a profit, of the shelves,
that's a pretty good sign that Vista isn't good for the market.
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