Previous page: Why does Microsoft talk about having shipped 40 million copies of Vista?
4. Still, how meaningful is it for Microsoft to boast about Vista shipping twice as fast as XP if the PC market is also nearly twice the size?
On the one hand, Microsoft is clearly shipping more operating systems this time around. That translates to higher sales and profits. Microsoft's operating system revenue between October 2006 and the end of March this year - the quarter when it began shipping Vista and pre-selling it to consumers, and the quarter of its official release - was $7.86 billion. That is 72 per cent higher than its revenue in the same quarters around XP's launch, $4.57 billion.
Microsoft's profit from selling operating systems the last two quarters was also staggering: $6.1 billion, or nearly 80 cents for every dollar earned (Microsoft did not break out profit figures by product line in 2001).
On the other hand, as observers have pointed out, Vista should be shipping faster than XP. The PC market is about 72 per cent larger than during XP's launch (58.9 million PCs shipped worldwide in Q1 2007, versus 34.2 million PCs shipped in Q4 2001).
Similarly, the total installed base of PCs today is also 47 per cent bigger (1 billion versus 680 million, according to IDC). By those measures, Vista needs to ship between 50-75 per cent faster than XP just to match the latter's "penetration rate," argue some.
Moreover, while Windows XP is now widely considered to be Microsoft's most successful OS ever, it actually started off as one of its weakest. Launched in October 2001, when many countries were still recovering from the dot-com crash, XP didn't provide a lift to PC sales. U.S. PC sales actually fell 10 per cent year-over-year for the quarter in which XP was launched. Customers were also fatigued: Windows ME was released just a year earlier, in September 2000, and Windows 2000 launched in February of that year.
Jupiter Research's Michael Gartenberg says he's far from blown away by Vista's uptake rate. "What we're seeing is normal demand," he said.
Still, absent a better alternative, Microsoft's comparison is a "reasonable" one, Gartenberg said. After all, "When people list the highest-grossing motion pictures of all time, do they take into account the fact that ticket prices are much higher today?"
5. Is there any evidence that Microsoft is using less legitimate means to boost shipments of Vista?
You mean like channel stuffing? The practice of arm-twisting partners into taking more products than they need or can sell is as old as the manufacturer-distributor relationship itself. While it can create a short-term boost in shipments, true channel stuffing usually ends up hurting all partners, with lower profits, management headaches and plummeting stock prices for all.
At least one blogger argues that Microsoft is doing this - but with its Xbox 360 console, not Vista. Microsoft's Kutz strongly denies any such hanky-panky with Vista, although he declined to elaborate.
"One thing we never talk about is our relationship with OEMs. That gets to remain confidential," he said.
That leaves conspiracy theorists and anti-Softies some ammo. But analysts say they haven't seen anything to indicate this. "It's not even worthy of discussion," said Gartenberg.
"I just haven't heard of any special deals," said Ian Lao, an analyst with In-Stat. Lao says that his research - which includes checking inventory levels at firms in different levels of the supply chain - has not turned up any unusual buildup of Vista software or licenses among distributors or PC manufacturers.
He points out there are strong financial reasons discouraging OEMs and distributors from buying up Vista licenses and "hoarding" them for future shipments. Besides playing havoc with their cash flow, it could also expose those firms to taxes for any long-held inventory.
"It's like buying an extra 100,000 hard drives and having them sit around in your warehouse for a long time," Lao said. "It's very bad for your accounting."
6. So is there any way to figure out how many people are really using Vista today?
Nobody has officially stepped up to the plate, so we decided to do some fiddling on Excel. Take IDC's estimate of 1 billion PCs in use worldwide today, and multiply that with research from Net Applications Inc. showing that 3.74 per cent of PCs connecting to the Internet run Vista. That's based on a sample of 600,000 Web sites and is the most up-to-date number available, according to analyst Vince Vizzacarro.
The rough result? About 37.4 million Vista users worldwide after about 120 days - not far off Microsoft's figure of 40 million shipments in 100 days.
And how scientifically valid is that number? In-Stat's Lao says while it "may make some statisticians cringe, it is not a bad starting point." IDC's Daoud goes further, saying this back-of-the-napkin calculation "points to Microsoft's numbers being legitimate."
Continued: So where is Vista's fate most uncertain?
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