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.

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  • A Stoner
    I think that is a conservative estimate. Considering the fans of Windows 7 here on Tim's, I am guessing that several posters here will be buying multiple copies just to support Microsoft, not even to install into systems. Of course, it is also possible that these same posters are similar to all the Bots that were out and about during the presidential race, paid staff members that simply put out alot of propaganda.

    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.
  • wikiwikiwhat
    Windows 7 is great. I like it so far and thats just the beta. They might be getting my monies. Not sure which version though.
  • hellwig
    $1.5B is only 7.5M copies sold at $200. 7.5M isn't even a drop in the bucket considering how many computers exist in the world (over 70M new computers sold each year). 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?