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Early sales figures for Windows 7 nicely high, but do we know why?

By Scott M. Fulton, III, Betanews

Windows 7 Family PackThe initial sales figures for Microsoft Windows 7 after its worldwide launch on October 22 are still being tabulated, but the early estimates sound very promising: According to industry analysis firm NPD, unit sales for Windows 7 software SKUs in the US were 234% higher — better than triple — the unit sales for Vista’s launch, and US revenue from Win7 software sales was up 82% over Vista’s launch.

But as Vista veterans will recall, that launch was botched somewhat, first by a costly delay, then by a decision to launch the product twice (first to businesses in October 2006, then to consumers in January 2007), and then by a lack of participation from partners. And there were still more reasons the Vista launch fizzled, one of which, believe it or not, included the scheduling of the launch on a Tuesday.

Windows 98, Windows Me, and Windows XP all launched on Thursdays, to moderate success or higher; and Windows 7 launched on a Thursday. You would think that since NPD’s tabulation of sales figures runs between Sundays and Saturdays, the fact that the initial sales figures only reflect the first three days (plus all those pre-sales) of Windows 7 versus the first five days of Vista, would be even more impressive. Yet it’s those pre-sales that may tell the real tale here, according to NPD vice president of industry analysis Stephen Baker, who credited a better-run pre-sale event from Microsoft and its retail partners as contributing to the more successful launch this time around. If you’ll recall, the hype over Vista had fizzled long before January.

The top three selling SKUs in the three-day window were all upgrades: for Home Premium, followed by Professional (from Vista Business), and the Home Premium Family Pack. We don’t know specific unit sales numbers, but can we draw any conclusions yet about who is doing the upgrading and why? For instance, are they XP users, or are those folks more likely to purchase new PCs with Win7 pre-installed (whose sales are not included in these NPD figures, but whose early estimates also appear positive)?

“Questions like that on hardware are hard to answer after three days of sales,” Stephen Baker told Betanews this morning. “Some portion of the first three days of sales is just pent-up demand, driven by lack of product to sell in the first ten days. So in that respect, I am not sure what the initial motivators are.”

In his blog post on launch day, Baker credited stores like Best Buy with their willingness this time around to cooperate with Microsoft, especially with little things like displaying Win7-based PCs — not Vista — during early October even before Win7 or the PCs with Win7 were available. Seeing those systems, and some of their new form factors, might contribute to some of that pent-up demand Baker told us about.

“In general, though, consumers rarely buy PCs for ‘new’ features,” Baker told us, letting the air out of that balloon. “As a tool and a home communication necessity, PCs are most often bought on need. The latest form factor isn’t or design isn’t what motivates consumers to buy, it is what gets them to buy at the point-of-sale in the store. But getting them to make a decision to buy is based on need, price, and promotion.”

We definitely saw the promotion part of that solution as early as August, with a respectable and, for once, not insulting advertising campaign that blanketed all media, including television. But this time around, OEMs were participating in that promotion as well, and were in sync with Microsoft’s timetable, publishing early notices of markdown deals, and drumming October 22 into consumers’ heads.

But that doesn’t cover the need factor; and we wondered, how much did Vista contribute to that need. Since, after all, the top three selling SKUs were all upgrades, were folks really willing to dump Vista?

No, according to NPD’s Baker: He believes that the factor that publishers like Betanews had been calling the “Vista perception problem” are not as pervasive as we make it out to be, especially in the consumer space. More importantly than how we may dramatize things, consumers were simply more motivated by the “refresh” aspect of the new system, says Baker.

“I would suspect that most of it is new look-and-feel, and a PC refresh without the cost,” he told Betanews. “Bloggers may dislike Vista, but the vast majority of consumers really don’t mind it.”

Copyright Betanews, Inc. 2009

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