Windows 95 Sales Fail to Meet Expectations

CobraBoy (
Sun, 08 Sep 1996 10:55:08 -0700

SEATTLE (Reuter) - A year after its massively publicized introduction,
Microsoft Corp.'s Windows
95 computer operating system has fallen short of the most optimistic
expectations for the software
giant and the industry.

Even though more than 40 million copies of Windows 95 have been sold,
making it the fastest-selling
new software ever, it would have been impossible for any product to live up
to the unprecedented
hype of the Aug. 24, 1995 launch, when stores around the world opened at
midnight to greet long
lines of customers.

The Redmond, Wash.-based company spent tens of millions of dollars
promoting the product with
stunts that included buying the entire print run of the Times of London and
lighting New York's
Empire State building in a Windows color scheme.

But the product, delivered eight months late, has fallen short of its sales
potential in part because
Microsoft delivered a mixed message to business customers, analysts said.

``It didn't do as well as it could have,'' said Rob Enderle, an analyst
with Giga Information Group.

Scores of software and hardware companies that had hoped for a big boost in
sales were
disappointed when only a brief spike materialized.

``People who were expecting major coat-tails were somewhat disappointed,''
said Scott Winkler, an
analyst with Gartner Group.

``It's not as though it hasn't had an impact,'' he said. ''It just hasn't
had the huge earth-shattering
impact some people were looking for.''

Symantec Corp., which had been among the most bullish of software companies
at the time of the
Windows 95 launch, ended up posting disappointing financial results when
retail sales of the
operating system fell short of its projections.

Touchstone Software Corp. had to pay $1.3 million in cash and stock to
settle a shareholders
lawsuit brought after the company's sales failed to meet expectations tied
to the Windows 95 launch.

Many software developers apparently saw their crucial holiday season sales
suffer last year because
store shelves were jammed with blue-and-white boxes of Windows 95,
resulting in a shortage of
space for seasonal products, said Ann Stephens, president of PC Data Inc.

To be sure, sales of Windows 95 and the accompanying Office 95 upgrade
drove Microsoft sales
up 46 percent last year to a record $8.67 billion and cemented the
company's status as the industry's
dominant company.

Microsoft executives say they are thrilled with the sales figures, and
industry analysts estimate that by
sometime next year, the installed base of Windows 95 will surpass that of
the older version of
Windows, now used on about 100 million computers worldwide.

But Enderle said the figure could have been even higher if Microsoft had
done a better job of
handling the huge demand for technical support from customers who were
frustrated trying to install
the system.

He and other analysts said corporate America adopted a go-slow approach
because Microsoft
already was promoting the new version of its high-end Windows NT operating
system, expected to
be available in stores in the next several weeks.

``Microsoft sent a lot of signals that NT was going to be the answer,''
Winkler said. ``Many people
began to believe that Windows 95 was being downplayed.''

But now that Windows NT 4.0 has been launched, Winkler and others believe
only a relatively small
proportion of corporate users will elect to pay the added software and
hardware costs needed to
use it instead of Windows 95.

``Windows 95 is going to do great,'' he said. ``The mistake people made was
in thinking it was going
to be a fast, sweeping change rather than a slow, building change.''

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** History 101** Hiroshima 45 - Chernobyl 86 - Windows 95 ============================================= "The only problem with Microsoft is they just have no taste, they have absolutely no taste, and what that means is, I don't mean that in a small way I mean that in a big way. I have a problem with the fact that they just make really third rate products."

Steve Jobs, Triumph of the Nerds, PBS Documentary