Wall Street analysts are being too optimistic about sales of Windows Vista, Steve Ballmer, Microsoft's chief executive, told financial analysts in New York on Thursday.
Vista, the latest version of the Windows operating system, was released to corporate customers late last year and to retail customers last month. Analysts have said industry growth was slowed by the repeated delays in Vista's introduction.
But Ballmer suggested that Vista's release would generate only a "small surge" in PC sales. He said forecasts for sales in the fiscal year beginning in July were too high, noting that the analysts' spreadsheet models called for strong growth in Vista sales, while at the same time predicting slower growth for the rest of the personal computer industry.
PHOTO: AFP
"These things are out of whack," he said at an analyst conference that was broadcast on the Internet.
"If Vista is growing, there should be a lot of people participating," he said, referring to other companies in the PC industry.
Ballmer suggested that PC industry growth would not reach the 12 percent to 15 percent annual rates that some analysts have been predicting.
Ballmer's comments also suggest that customers will not rush to upgrade existing machines to the new software, which users say is both memory-hungry and less compatible with existing software and hardware than Microsoft had indicated.
At the same time, Ballmer said he was optimistic about the role that the new Windows software would play in the company's profit growth, in the long run. He listed Windows as the company's leading growth business in a list of nine that could potentially create more than US$0.5 billion in profit growth during the next three years.
Ballmer spoke after the stock market closed. Microsoft stock fell about 1.7 percent in after-hours trading, to US$28.95.
"We need a strong services platform," Ballmer said, pointing to the infrastructure the company is now building under its Live brand.
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