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Windows 7 could help PC, chip sectors rebound

Agam Shah | Oct. 22, 2009
Along with economic gains, the new operating system may drive buyers back to the market

"I would like to see that happen in 12 months, but that's being pretty aggressive," Rausch said.

Group One, an options trading firm in San Francisco, is already rolling out Windows 7 systems powered by Intel's latest Nehalem microprocessors, said Terence Judkins, managing director of systems. Windows 7 offers better support for the latest hardware than did previous Windows operating systems.

"When Microsoft offered the Release to Manufacturing to volume license customers in early August, we switched to that not just for new Nehalem machines, but actually for any trading machine" that was being upgraded, Judkins said.

The company has elected to retire the older workstations that do not support Windows 7, Judkins said. "We still have a fair number of XP machines in our environment, but we are no longer imaging any machines with it," Judkins said.

However, before companies start making big investments in Windows 7, there needs to be a security net for them to feel safe spending money, analysts said. There is growing confidence that the economy won't be as bad next year as was previously feared, Advanced Micro Devices' CEO Dirk Meyer said on a conference call last week to discuss his company's financial results.

"The tone of the conversations we are having with CIOs ... has changed in the last three months. Clearly, wallets are starting to [open] up," Meyer said.

Gathering in New York for the Windows 7 launch this week, hardware vendors were also hoping for a sales boost with Windows 7.

The Windows 7 launch "is a great opportunity" to move to a new machine, said Tom Tobul, executive director of marketing for software and peripherals for Lenovo. Tobul was showing off Lenovo's new ThinkPad SL410 and SL510 laptops, which are timed for release with Windows 7 this week. The laptops are priced starting at $529 and aimed at small and medium-size businesses.

"There's also a huge tail of XP in the market" he said, referring to users who declined to move to Vista. Tobul and other PC company executives stressed that Microsoft brought hardware makers into the testing process early on to avoid the well-publicized problems that hurt Vista.

PC shipments have progressively improved after a big collapse in the fourth quarter of last year, IDC's Daoud said. After three consecutive quarters of declining or flat shipments, IDC last week said global PC shipments grew by 2.3 per cent year-over-year, to 78.1 million units, during the third quarter. IDC expects PC shipment growth of about 9 per cent in 2010.

Revenue will also stabilize as PC shipments grow, IDC said. IDC estimates PC revenue will drop by 16 percent this year compared to 2008, but in 2010 it expects revenue to be flat or to grow 2 per cent to $210 billion.


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