Microsoft says Vista sales doubling Windows XP pace

Mon Mar 26, 2007 3:11pm EDT

(Adds comments from the company, background)

SEATTLE, March 26 (Reuters) - Microsoft Corp. (MSFT.O) said on Monday that it sold more than 20 million Windows Vista licenses in the first month since the operating system's general debut on Jan. 30.

The world's biggest software maker said the pace of Vista adoption is at more than twice the rate of its predecessor, Windows XP, which had sold 17 million licenses after its first two months of release.

"It's a little bit better than what we were expecting," said Bill Mannion, a director in the Windows marketing group.

The numbers released by Microsoft follow mixed messages from the company about the pace of adoption for Windows Vista, the company's first major operating system upgrade in more than five years.

Prior to Vista's general release, Microsoft Chief Executive Steve Ballmer had predicted that consumers would move to Vista faster than past Windows upgrades.

However, several weeks after the release, Ballmer tempered expectations by saying analysts' forecasts for revenue from Windows Vista in fiscal 2008 -- Microsoft's next business year starting in July -- were "overly aggressive."

Microsoft said it was surprised by how many Vista customers were choosing to buy the premium, or more expensive, versions of Vista. The sales figures represent licenses sold to computer manufacturers, copies of upgrades and boxed software sold to retailers.

Also, more retailers were stocking computers loaded with the premium versions of the operating system, which comes with the "Media Center" digital entertainment system.

The Windows franchise is the centerpiece of Microsoft's business, because the company makes more than 75 cents in operating profit for every dollar of sales. The cash flow generated by Windows allows Microsoft to make investments in new businesses like digital music players and online services.

Windows operating systems run on more than 95 percent of the world's computers and represent the company's biggest profit driver.

Microsoft stock was down 19 cents at $27.83 in afternoon Nasdaq trading.

((Reporting by Daisuke Wakabayashi, editing by Maureen Bavdek; Reuters Messaging: daisuke.wakabayashi.reuters.com@reuters.net; +1 206 652 2326)) Keywords: MICROSOFT VISTA/

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