Analyst - Attacks could hurt sales of Windows XP, PCs
NEW YORK, Sept 18 (Reuters) - Microsoft Corp. (NasdaqNM:MSFT - news) distributed its new Windows XP operating system to computer makers three weeks ago, but after last week's terror attacks, XP may not provide the boost the technology sector hoped it would.
Because older computers may not have the processing and memory required to run XP, analysts had expected the launch to spur PC sales.
However, the events of Sept. 11 could force Microsoft to slash its marketing plans for Windows XP, analysts said on Tuesday, and sagging consumer confidence may erase any gains that the launch of the new operating system would have provided to struggling technology firms.
``We would expect the launch of Windows XP to be more muted,'' Credit Suisse First Boston said in a research note analyzing the effects of the attacks on the World Trade Center and the Pentagon.
Microsoft was not immediately available for comment.
``At least 70 percent of consumers would need to upgrade their systems to run XP,'' Credit Suisse analyst Kevin McCarthy said in the note. ``This decision, however, is easily deferred, given current world events.''
Windows XP, scheduled to go on sale Oct. 25, is the biggest consumer operating system overhaul in six years for Redmond, Washington-based Microsoft, which has said it will back XP with a four-month, $200 million marketing campaign.
Credit Suisse analysts said they had believed it possible that unit sales could increase 10 percent in the fourth quarter if XP achieved modest acceptance rates. But no longer.
``Given the expected decline in consumer confidence, we now believe introduction of XP will not stimulate PC sales in the near term,'' McCarthy said. |
