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Windows 7 could help PC, chip sectors rebound

By Agam Shah
October 21, 2009 08:10 PM ET

IDG News Service - The global economy may not be robust, but the PC and chip sectors are hoping to gain some ground with the help of Microsoft's Windows 7 OS, which will start shipping on Thursday.

After widespread disappointment with Windows Vista, there is a lot of interest in Windows 7 as consumers and enterprises look to upgrade aging hardware and software, analysts said. Demand for PCs with the OS could spike in the first few weeks, and the OS could play a role in driving professional PC purchases next year as budgets grow and enterprises look to upgrade IT infrastructure.

"There is obviously interest in the beginning, so you see a potential spike in demand in the first month or so. Then it goes back to a normal mode whereby the market is driven by natural refreshes, which tends to be on the corporate side," said David Daoud, research manager with market research firm IDC.

The OS's effect as a major factor in PC purchases could dry out after a month or two, Daoud said. However, it could play a minor role in buying decisions during the holiday season, when PC shipments generally go up. IDC expects PC shipments during the fourth quarter to go up in a "mid-single-digit" percentage range, Daoud said.

Some consumers are delaying PC purchases until after the Windows 7 launch to avoid Vista and the hassle of upgrading, analysts said. Windows Vista, which started shipping late in 2006, was mashed by critics as a bloated OS with slow boot times, device driver incompatibilities and other problems. PC makers in June offered free Windows 7 upgrades to customers who bought PCs pre-installed with Vista, but some customers may decide to wait.

The real effect of Windows 7 on PC shipments may be felt in 2010, when enterprises start upgrading client PCs, analysts said. Some customers view Windows 7 as a major OS upgrade and will take advantage of it to roll out new hardware. The last major PC refresh cycle for those companies was earlier in the decade with Windows XP, which was released in 2001.

"We tested things and discovered problems with Vista early on," said Steve Rausch, director of information services at Gibson General Hospital in Princeton, Indiana. "We had issues with it. We couldn't get it to work with our applications," he said. Rejecting Vista ended up costing the hospital money, because it had to pay about US$20 per PC to downgrade to Windows XP.

The new OS makes the decision to buy new hardware easier, as Windows 7 is "not a hindrance as Vista was," Rausch said. The hospital has started rolling out Windows 7 PCs on a per-needed basis, and a large-scale rollout may not happen until more money is available.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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