Analyst: Windows 7 to Add $1.5B to MSFT Revenue
Although Microsoft’s product line is now diversified into many areas, its core business is still its operating system.
According to Bloomberg’s earlier report on Microsoft’s desire to encourage users to upgrade to more expensive versions of Windows 7, operating system software accounts for 28 percent of the company’s $60.4 billion in annual revenue and is its most profitable business.
Collins Stewart analyst Sandeep Aggarwal projected that Microsoft could rake in as much as $1.5 billion in additional revenue from the release of Windows 7. ZDNet reported that, of that $1.5 billion, nearly two-thirds of it will come from upgrades--which we assume means licenses from owners of Windows XP and Windows Vista.
Aggarwal said that as much as $680 million could go Microsoft’s way if the company manages to increase the number of ‘premium versions’ of Windows 7 sold to users. This relates heavily back to yesterday’s report on Microsoft’s aim to profit from netbook users wanting to upgrade their Windows 7 to something beyond the Starter Edition.
Finally, Aggarwal chimed in on the most hopelessly often discussed Windows 7 topic – the release date. While Microsoft stands firm on its original target of an early 2010 release, many signs are pointing to a date sometime later this year. The analyst believes that Microsoft will finalize the code for Windows 7 by June or July, giving the industry ample time to push for the holiday season. Of course, we won’t know for sure until word from Microsoft.
I do honestly think that $680 million dollars is conservative for upgrades. Maybe though the biggest sales will happen the year after release, so $680 million for either 2009 or 2010 might be accurate, while 2011 may see much more.
Funny that you mention those right next to each other. Those new computers may have Windows 7 on them already. In which case, Microsoft makes a fraction of even the OEM retail price, as the OEMs like Dell get huge bulk discounts. But then you have the people that will buy the retail version, and the people buying the premium versions. So it could balance out.
Am I missing something here? $1.5B doesn't even cover office supplies for the company of 100,000 people. Microsoft doesn't unlock for doors for $1.5B, much less for an OS release. Why write an article about made-up numbers?[/citation]
Lets say that MS only gets $40 for each OS they sell (OEM, after-market, upgrade, whatever), that's still only 37 million copies. That's not a good forecast for Microsoft, predicting only 50% market share. I can't imagine MS will still sell Vista after 7 hits the market, so what is going to be sold on the other 33 million PCs (and note, ~70mil was the 2007 number for PCs sold in the U.S.).
Why?
Plus since we expect a Q3 release this year, Microsoft maybe be talking only for 2009 year, so 1.5B in 3 months is not so bad.
Add up that the 2007 numbers don't apply here anymore, we are in and out of an economical crisis people try to spend their money more wisely. So we may see different numbers this year...
However, at my university the pressure is growing to migrate to the new OS and utilize the features of Server 2008 - we won't go Vista, but we will probably go Windows 7.
However, I am again seriously considering Linux again. I'm no longer a heavy gamer, and I can get most the software I want. If I'm really need windows apps, then I'll use VMWare to get access. However, I cannot afford to shell out the high price for Microsoft's OS and Office products anymore. That money could be put to much better uses while going open source.
People seems to forget that Microsoft is a BUSINESS ENTITY. What does that mean? Profit is the name of the game. They are not running a charity over there, giving out free software. The purpose of developing a new software is to SELL IT.
If Windows 7 performs well, i think they deserved to get paid for their hard work. Isn't that what business is all about?
This bashing for MS trying to make a profit is really ridiculous.
Indeed. Apple charges over $100 for every Service Pack to their OS.
No one is bashing them for making a profit. It is the method in which they plan to use bait and switch methodology in which to sell two copies of it's software. The bait is a computer with the latest software, Windows 7, the switch, oops, sorry, but you cannot have your antivirus, a messaging service, the internet AND something else running at the same time, unless you send us $199.00, which is about the entire cost of your new netbook computer.
Antivirus pretty much needed if you are internet connected. Seperate chat and internet applications are very much given, and then wanting to hit a calculator, or any other application to do anything else is going to hang up and tell you that you have hit your limit of running programs.
While I got rated down to unseen for the first post, my position still stands. This is all part of Bill Gate's original statement of eventual Microsoft sales, you will be charged per use, minute, hour, day, week, month, year. It is just a step in that direction.
Well, you got a laptop with Windows 7 installed, now pay us more money in order for you to be able to actually use the computer. The tools are all there, as Microsoft says it will specifically install every single needed peice of software to do everything, the only difference between started, home basic, premium, business and ultimate installs will be the license tied to it. Next update to Windows 7 will be a feature that allows limited duration licenses when Microsoft finds it cannot get enough upgrades at $199.00, it will start selling daily $5.00 licenses to th people who are poor enough they cannot justify a $199 upgrade, but can afford $5.00 today, then tomorrow, and the next day, and after how many days have they paid for a full product, but do not OWN said product? It may not happen as I say, but the way that Microsoft is setting things up gives a clear path down the road that I just gave.
Personally, I like Microsoft, always have. I loved windows 3.11, Windows 95, Windows XP. I also love Microsoft Office, and I am very much happy with their prices for that product for home/student users, now, but not in the past when a home user was still expected to pay $300 for a copy of it. Just because I like Microsoft does not mean I have to like every product, nor do I have to like every action they take. If they can make $50,000,000,000 in profit, great, but I say make that money on the up and up with direct sales and honest methods. Not back door hurt the poor the most methods, which is exactly who this type of setup is going to hurt the most. I can afford to buy a Microsoft Ultimate Windows 7, if I choose to, and while I also will likely buy a netbook, more people who will buy a netbook will be buying one because that is the only laptop they can afford to buy their child for schoolwork, and maybe 3 or four of them if it is a big family, and when that switch comes to their doors, they are not going to be in a position to just suck it up and make the payment needed to upgrade. I fear then, when Microsoft looks at it's profits, it will do what anyone in such a position would do that does not really care if they provide value to their customers, make a pay per play version that in the end sucks the money out of that poor families wallets month after month after month. Poor people who choose to pay per play make the mistake of short term pleasure for long term pain, but anyone who sets up the process for which it is allowed is not much better in my opinion. Maybe it will never go this route, but I see the paving stones being laid to allow it to happen.
1. OEMs get the crappy cheapest version to install on their low cost products
2. Lusers get frustrated, blaming OEMs (see EULA)
3. m$ arrives with the wonder-"solution" to luser problems: upgrade
4. Lusers pay more directly to m$, skipping OEMs
5. m$ unlocks the castrated version
6. "Everybody" happy - mostly m$ & shareholders, lusers screwed again, wintards will claim in unison "windblobs is great"