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Monday, June 30, 2008 4:57 PM/EST

Leopard Rises from XP's Ashes

News Analysis. Windows XP officially exits the OEM and retail channels after today. Let the Leopard and Vista competition really begin.

Windows XP won't completely go away, but it will be increasingly more difficult to find, and that could be very good for Apple. Because if computer buyers don't want Windows Vista, they'll have to look elsewhere. Can you say Mac OS X 10.5?

Here's the no-nonsense explanation about XP availability:

  • Today is the last day OEMs can offer Windows XP PCs.
  • System builders, which buy the software from distributors, can ship XP PCs through the end of January.
  • OEMs can offer XP as a "downgrade" option for PCs shipping with Vista Business or Ultimate, but usually at extra cost.
  • OEMs can still ship Windows XP Home on ultralow-powered notebooks like the Asus Eee PC.
  • Businesses buying Microsoft software through some volume-licensing programs can use "downgrade" rights to reimage Vista PCs with Windows XP.

XP's exit from OEM and retail channels comes at a time when Vista isn't doing so well. Microsoft boasts 150 million Vista licenses shipped, but the number loses its impact in the context of PC shipments.

Between Jan. 1, 2007 and March 31, 2008, PC manufacturers shipped approximately 342 million PCs worldwide, according to published Gartner figures. However, the figures include x86 servers. Being as generous as possible to Microsoft, I lop off 42 million units, to account for x86 servers and computer sales during the first 29 days of January 2007, when Vista wasn't yet available on new PCs.

That works out to about 300 million PCs during the same time Microsoft shipped 140 million Vista licenses. Typically, Microsoft sells about 80 percent of Windows licenses on new PCs. Being, again, generous to Microsoft, I figure 112 million Vista licenses. Based on this arguably loose estimate, Windows Vista shipped on about 37 percent of the 300 million PCs. I strongly suspect that one-third would be a more accurate number.

If there's so little demand for Vista—now, nearly seven years after XP's release—what happens when the older operating system largely goes away?

There has been some recent controversy about and even praise for system builders such as Psystar hacking Mac OS X for non-Apple computers. While many other bloggers and commentators view OS X-hacked clones as a Mac phenomenon, I see a different context: Vista's poor market reception. Why else would a PC builder make the effort and take the legal risk (from Apple) to offer Mac clones? Wouldn't system builders take the easier path of offering custom-made Windows PCs if there were more demand for Vista? After all, the sales volumes of Windows PCs are enormous compared with those of Macs. Better money is going to be where there is bigger sales volume—and that's not with the Mac.

There's a strange juxtaposition between the newest Apple and Microsoft operating systems. Microsoft customers are moving in reverse, to older Windows XP. Meanwhile, Apple moves forward. Microsoft's OS problems are many, but two stand out from the rest: fragmentation and system requirements, and both are intertwined.

Microsoft developed Windows Vista with expectation that at time of launch microprocessor speeds would be 4GHz and over (technically true for dual-core chips) and graphics accelerators would deliver three times the performance needed for Windows XP. Microsoft misread the market. The massive shift to laptops, and even increased data cell phone usage, has Moore's Law running in reverse.

According to Gartner, third-quarter 2007 U.S. notebook shipments exceeded desktop shipments, 52 percent to 48 percent, for the first time. Garter predicts that, worldwide, notebooks will overtake desktops in 2010, while IDC predicts that the shift will occur in 2009. The point: Computer hardware specifications actually went down just ahead of Vista's release, when looked at from the perspective of increasing notebook sales. Vista struggles, particularly graphics, on many lower-cost laptops and can't really go on ultralow-powered models like the Eee PC. For these models, Microsoft licenses Windows XP Home.

The situation causes more Windows fragmentation and accentuates existing fragmentation. It's baffling that with six Vista editions—Starter, Home, Premium, Business, Enterprise and Ultimate—that not one is suitable for ultralow-powered PCs. It's a wonder that Microsoft demands yet another Windows version, Mobile 6.1, for cell phones and PDAs. Apple has one Leopard version for all major computing categories, and a Mac OS X derivative for iPhone.

Apple has shifted development energy to Snow Leopard, which presumably will ship before Vista successor Windows 7. Apple's development emphasis: improving the operating system instead of adding bunches of new features. I've seen lots of praise on the blogs for Apple's approach, but little explanation for the context. Apple can make performance the priority because the major competing operating system is in sales chaos—and successor 7 is based on struggling Vista.

The only Mac downside I see to XP's OEM and retail departure is Windows virtualized or loaded by Boot Camp. Officially, from tomorrow, XP disappears from store shelves, which means Mac users looking for Windows will find Vista as the only option. For a while yet, some retailers and distributors will sell out XP inventory. But at some point, there will be none left. If Vista is no choice for many Windows users, how much less can it be for most Mac users?

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Comments (15)

You are misreading a lot of things here Joe. Standard laptops are becoming more powerful each year, meaning the power in terms of processor speeds, memory and graphics is more than enough to run Windows Vista. For instance, a friend of mine is running Vista Home Premium 64 bit on a HP Special Edition notebook with 4 GBs of RAM with the Intel X3100 shared graphics and 219 GB hard disk and a Intel Core 2 Duo processor 1.8 GHz. This is a system that she bought for around $1,300, which is average for most folks. You can't deny that its average because you Joe was willing to spend 1,799 on a MacBook Air or $2,000 on a MacBook Pro. Persons who purchase an ASUS EE PC probably already own a more powerful laptop/desktop combination already and only need an affordable sub notebook for nonchalant activities. But its not a defining example of where notebook or PC purchases are heading in the future. People will continue to invest in full featured, multimedia systems that are powered by Windows. Leopard and iPhone are good for Apple, but I do see folks running Windows on their Intel Macs and using Windows more and more on those Macs, so its also good for Microsoft. Windows 7 being based on Vista has nothing to do with it not being worthy to run on future UMPC devices. Intel will continue to improve the performance of ATOM and devices themselves will improve in disk space and memory especially with future prediction of SSD drive prices going down. Bill Gates has mentioned that Windows 7 will use less memory than Vista which means Microsoft will probably have a suitable successor for XP that can run on these devices in addition to standard desktops. I don't see anything wrong with Windows Mobile, its working for the Company, the developers are able to innovate with it and bring integration with Windows applications, the 6.1 update for instance improved compatibility with Office 2007 XML files. So its not holding back innovation and as you can see with devices from Companies like HTC the full feature richness of the Internet is possible on Windows Mobile and I am sure Microsoft will get there with WinMO 7.

Andre,

You have a lot of "wills" in there. My prediction is that Microsoft will NOT accomplish anything like what you predict. Windows is still a very poor copy of the Mac OS. It tries to accomplish this with bloated 20 year old code. Windows 7 may eventually arrive, but by then Apple will have moved ball again, or will have taken it home to Cupertino.

Microsoft has to start with a clean sheet of paper instead of warming over Vista again or migrate to UNIX if it is ever to be relevant in the future. Personally, I am glad to see Microsoft's slow demise. They have stifled progress for too many years and it will be interesting to see which "tar pit" the dinosaur finally gets trapped in.

David L., ACSA, MCSE


You're right Joe, Microsoft customers are moving in reverse. Our IT and bean counter division wouldn't even entertain looking at Macs. They bought 900 laptop PCs that came with Vista. After IT pulled out their hair and still couldn't get them to work on the back end, the baldies reverted to XP.

bluemarlin1402 :

Wow Andre, who's paying you to lie for Microsoft? Your second sentence has nothing to do with the argument. Of course laptops are becoming more powerful, but how does this refute the premise, that the shift to laptops caught MS unaware and the standards to which Vista was developed are not meet in majority of US bought computers (laptops).

4GB ram might be average on Vista computers, but certainly not Macs. Both macbooks and macbook pros ship with 2GB and perform better than a comparable Windows Vista computer.

Your comment about UMPC not being the a defining example of where notebook purchases are heading is just false. The fastest growing category of laptops IS the UMPC.

Also, what does people running windows on Macs have to do with Vista? If the general public (pc users) thinks Vista sucks, you surely must think that Apple users think it sucks also.

If you don't see anything wrong with Windows mobile, you must not have gotten anywhere close to an iphone. This is just not supported by fact. The iphone is a game changer and NOTHING has come close. Windows mobile is child's play compared to Mac OX for the iphone

In the end, all of our arguments mean very little, the consumer has the final word. Sales of Apple laptops up 62% 1Q Y/Y. Nuff said.

Walt :

I work for an organization that is almost exclusively Windows. So far, under our licensing agreement, we are installing XP Professional on all of the new PCs we buy.

Last year I bought a MacBook Pro to evaluate, with the thinking, "anything but Vista". As I suspected, it outperformed our wildest expectations, but for one problem - we have too many third-party applications that depend upon Windows (Mostly web applications that use ActiveX controls). Until our vendors see the light, or someone comes out with a browser for the Mac that supports ActiveX, or someone gives us a whole lot of money to replace these applications, we are stuck.
I'm personally using the Mac every day at work, with XP in a Boot Camp partition, most of the time running it as a VM so that the Windows desktop just looks like anonther Mac application. It works well for me, but it is too expensive to consider the cost of the Mac plus the Windows license, for all of our desktops.
IMHO the mistake the Microsoft made was in assuming that all PCs are at some level "entertainemnt" machines, and then capitualting with Hollywood to put in all the ridiculous requirements for both hardware and software to prevent duplication of DVDs. If they had stuck with the XP model of having a "Professional" and an "Entertainment" edition, we would all be much better off.

Walt

Gis Bun :

Any company who flips over to the dark side [Macs] because they can't get Windows XP seriously have some management problems [deployment costs, software costs, hardware costs, training costs]. If they are big enough, they have a volume license which entitles them to still put on Win XP.

Any individual who switches over is just plain stupid.

Win XP is still getting full support for 2 years and then extended support until 2014.

Tronguy :

How many copies of XP does one need? I have 3 PCs and 3 copies of XP Pro. If I need to retire a PC and build a new one, it just gets the copy from the retired PC. Besides, there are plenty of cheap, unsold copies of XP around.

Vista, OSX and Linux are not an option for me. Vista is a pig and there's very little worthwhile software available for OSX and Linux.

Brent :

I could easily point out more than a handful of Corporations that I personally know of who have gone the Mac route for notebooks, yanked off OS X because of application compatibility and then given up on XP on that hardware because of 'issues' (mostly drivers). As a dyed in the wool longterm Microsoft supporter, I am stunned by the usability of OS X. But, the reality is that I don't own a Mac machine and probably never will until I can put OS X on a machine of my choice. I purchase, on average, about a half-dozen notebooks and 3 or 4 desktops per year for my family. All of the last batch have come with Vista. I have had zero issues. None. They perform well, are very stable, and the UI learning curve even for my 80-year old parents was minimal. I have yet to pay more than $600 for any one of them and usually much less. All have been name brand and most are dual core or better, and 2-3 GB RAM. That just isn't possible with Mac hardware. In my opinion, Apple has a golden opportunity to make major market share increases in the next year if they will open up their market to new opportunities. Truth be told, the business world is still a harder knot to untie.
Just my opinion, for what it is worth...

Tom :

Brent,

If you went to Mac's you wouldn't need to buy 3 - 4 PC's a year for your family. They'd actually last a lot longer...

I think one of the other posters here put it best. Until MS rewrites Windows, and gets rid of all the old code, it'll eventually go by the wayside.

As for apps; Office 08 works quite well with my work peers who use both Office 03/07. I have no problem supporting 50 plus servers using CoRD. Oh, and since I've purchased my MB back in April, it's only been booted twice; once for 10.5.3, and just yesterday for 10.5.4.

RogerV :

Folks are siting incompatibility of Macs with internal web applications that heavily use ActiveX controls as a stumbling block for migration to Mac OS X.

Hmm, so if WINE can run, say, IE 6, and those ActiveX controls, then things would be good to go...

Running the Microsoft IE browser on WINE would be great because it would have much lower overhead than running a Windows app in a VM like Parallels or VMWare. It would also be much more like native Mac OS X app as well (because it reality, it would be a Mac OS X process - the WINE layer sitting right on top of Mac OS X layer).

As to Mac Office apps on Mac - they work pretty good. I routinely move the file formats for Word, Excel, and PowerPoint between Mac and Windows versions of those apps.

PMC :

@Tronguy (and other potential license violaters in denial of reality and who didn't read the license terms they agreed to)

Unless you have a retail boxed copy of XP, you will be outed by Microsoft; OEM copies of XP cannot be moved from machine to machine.

malark :

I have read all of the posts, and the one thing I noticed in the comments by most is that the people that state something about another OS than what they use is that they all seem to say that they have never used [or used other than test] the opposite OS. Before looking kind of dumb to people that are not rich to buy new machines every year, or not trained in some form of computer science, actually use the 'other' machine or OS then maybe make a valid informed statement.

I have owned and used both types of machines and OS over the last 25 years. And it is easier to program the Mac OS than Windows, even with Windows originally being a rip-off copy of the Mac OS [and yes, Microsoft was sued over it and lost]. Like one poster noted, Windows has to be re-written from scratch and make it smaller not bigger with every new version, problem with the programmers is that they are scared to do so. Just write the code to 'add and shift' rather than add this then subtract that while counting every 3 turns and by the way add and shift for the answer.

The problem with the Macs was Apple stuck its head in the sand not allowing others to copy the base machine [not counting the junk machine that was built years ago] like the PCs were. If they copied Sun with Java, license core machine but do not make changes then they would have more in the market and the softeware would come also. A lot of times the software lack is not companies not wanting to do it, just most classes are pc based teaching and not as general as people would think so which machine are new programmers going to feel able to do.

Which some simpler, open a window in this type and that size, or clear the matrics then build the window with the size and this type while keeping a link to that value and those pointers [stated generally for space]. Most will pick the first, but when a programmer comes to do the code he will pick the second because of the training and not feeling like the first is doing every thing reguired for the window and he would need to do more, yet on a Mac that is all that is needed generally. Having gone through this training and thinking, I did have the same results when first programming on a Mac. Yet, after getting over the brain-washing something that was giving a week to complete on a PC was finished in less than an hour on a Mac.

moon1234 :

Mac fan boys here galore. All are too young or too ignorant to know that Windows NT-Vista is built on a modified unix kernel.

Microsoft has just had more time to polish the GUI.

The reason most companies are reluctant to replace Windows XP is because it is stable, manageable and works. Having a completely heterogeneous environment makes it much easier to support the user base and application base.

Vista has some radical interface changes that may be minor for home user, but has substantial impact on a business. Several hours of lost time multiplied by 500-5000 users is serious cash.

Microsoft, in officially killing off XP, is trying to artificially show increased uptake of Vista. My guess is 90-95% of major corporations will wait for Windows 7 before making any kind of shift to a new OS. It is a logical decision. With XP downgrade rights most corporations will continue to use their already developed deployment images when acquiring new computers.

I manage 125 PCs for my company. We also sell medical software with PCs we resell. I have zero plans to ever deploy Vista. We had a two month trial with Vista with a select number of users to assess potential pitfalls. The trial users, after two months, were grateful to return to XP.

Microsoft needs an gradual enhancement of their user interface and not a wholesale shuffling around of options in the GUI. There are a lot of nice management features in Vista I would love to take advantage of, but with the GUI deficiencies I can't deploy it.

This is not the same as going from Windows 2000 to XP.

Peter :

The major issue with users and VITA is that M$ totally revamped a familiar user interface (technically wasteful, totally user unfriendly, and a branding disaster;) and added extremely complicated security layers.
Oh yes, and it's a pig, etc., etc., etc. But, the outstanding issue (for users and M$) is that the windows GUI has evolved since 3.1 and been a constantly improving environment for people brought up on and more importantly brought into personal computing. Then they turn it upside down. It's like making chocolate milk taste like lemonade. Warm lemonade.

James Lyon wrote:

Pure and simple Microsoft blackmail to try to force companies to purchase their new unwanted Vista operating system. Many large and small companies my look elsewhere to Sun Systems etc.

With the economic downturn small and large companies are not going to purchase new systems and software because Microsoft just want them to do so in order to use Vista. Vista may be OK for home use but not for general business use.

In the end it is Microsoft that will be the loser.

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