Fri, Mar 24, 2006 - Page 12 News List

Local firms take Microsoft Vista's delay in stride

By Jason Tan  /  STAFF REPORTER

Shares of local computer makers declined yesterday after an announcement of the delay of Microsoft Corp's new operating system, but the impact would be limited, analysts said yesterday.

Acer Inc, the world's third-largest notebook-computer supplier, fell 5.8 percent to close at NT$64.5 (US$2) on the Taiwan Stock Exchange. Asustek Computer Inc (華碩電腦), the nation's top notebook computer maker, dropped 2.5 percent, to NT$90.2, while Quanta Computer Inc (廣達電腦) declined 0.2 percent to close at NT$50.9.

In a report released yesterday, Citigroup Research said that as Vista will require a new hardware standard, its postponement would affect global shipments on central processing units, PCs and video-graphics-array cards this year.

"While the delay is only one to three months, it would mean missing the critical holiday season in the fourth quarter ... We see a larger downside risk to clone and consumer PC segments, as both usually are the first to upgrade," it said.

Suggesting investors avoid most PC and motherboard makers' stocks due to a lack of catalysts, Citigroup downgraded Asustek's shares to "sell" from "buy," as well as lowering its target price from NT$103 to NT$89.

Computer makers, however, said they did not expect a significant impact on their businesses.

"This announcement will not affect our business performance or target shipments very much this year as we are all prepared. We already knew early this year that the new Windows Vista might be delayed," an Asustek executive said on condition of anonymity.

And even though Vista's availability is on track, the effect on computer sales would be limited, he said.

Citing local enterprises, the executive said that most firms are still using Windows 2000 instead of Windows XP Professional, the result of product stability and company bans on use of equipment for recreational purposes.

The delay would not prompt Asustek to revise downward its global brandname notebook shipments for the year, which will stand at 3 million units, up from 1.8 million last year, he said.

"Though the PC market in Europe and the US will record weaker growth this year, emerging markets such as China and India will continue to drive the momentum of overall market expansion," he said.

Microsoft announced on Wednesday that it would delay the debut of its consumer versions of Vista OS by two months to January next year because it needed to enhance security and other functions.

According to Amy Teng (鄧雅君), an analyst at Gartner Inc's Taiwan office, the delay of Vista did not necessarily paint a gloomy picture for local PC vendors.

"There are six versions of Vista to be made available and some of the specifications are yet to be disclosed. Makers should take the delay window and think of how they should package all these versions appropriately to reach the right target users," she said.

These firms should also take the chance to beef up education and awareness of Vista products, she said.

also see story:

Investors, analysts slam Microsoft's delay

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