PC Makers Don’t See Sales Spark From Microsoft’s Windows 7

SAN FRANCISCO -(Dow Jones)- Most personal-computer makers aren't expecting Microsoft Corp.'s (MSFT) new Windows 7 operating system software to provide much of a sales spark when it debuts later this year, an influential investment analyst says.

Barclays Capital analyst Ben Reitzes, during a conference call Monday, said none of the computer makers with which he met at the recent Consumer Electronics Show in Las Vegas cited Windows 7 as a potential sales driver, even though computer makers that adopt the software can add features such as touch screens or prolonged battery life.

PC makers aren't holding out much hope because they "feel burned by Vista," the operating system software that Microsoft started selling in early 2007, Reitzes said. Operating systems command and control key computer functions. The launch of Vista was marred by a largely negative critical reception. Although many critics say the operating system has improved, many corporate buyers have held off on installing the system, preferring to remain with its predecessor, Windows XP.

The sentiment around Windows 7, a test version of which was released last week, is troubling because the new software was expected to provide one of two major bright spots for PC sales this year. PC Magazine, for example, in December predicted that Windows 7 "will catalyze the tech economy" by driving consumers and businesses to buy new PCs.

The supposed dim prospects for Windows 7's impact on PC sales also suggest there are diminished expectations that touch screens will be a big winner with consumers. Microsoft's Windows 7 adoption of touch screens is a gamble that consumers will ultimately prefer using their fingers to command their machines by literally touching the screen rather than using a mouse and keypad.

Interest in adding this new wrinkle grew from the success of the Apple Inc. ( AAPL) iPhone and iPhone 3G smartphones, which feature touch screens.

Spokesmen for Hewlett-Packard Inc. (HPQ), Dell Inc. (DELL) and other computer makers and Microsoft didn't have an immediate comment. Reitzes didn't identify the computer makers with which he spoke.

The second major computer-sales driver for 2009 is netbook computers, which are smaller, inexpensive and ultra mobile computers that contain far fewer features than traditional notebook computers.

Here analysts are still very bullish. They expect netbook sales to quadruple this year to 40 million, according to various estimates.

Even with the burgeoning new category, overall PC sales are expected to fall 2% to 10% this year, according to most analysts' forecasts.

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