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Originally published March 26, 2007 at 12:00 AM | Page modified March 26, 2007 at 3:16 PM

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Microsoft reports strong Vista sales in first month

Microsoft sold more than 20 million licenses of its most important new product, Windows Vista, during February, its first full month on...

Seattle Times technology reporter

Microsoft sold more than 20 million licenses of its most important new product, Windows Vista, during February, its first full month on the market, the company said this morning.

"That is more than double the initial pace of sales for Windows XP," said Kevin Kutz, director of the Windows Client group, referring to the version of Microsoft's flagship operating system that Vista replaces. XP was released in 2001.

There are now close to 900 million PCs in the world, compared to 540 million in 2001, according to market researcher IDC. New PC shipments also have grown dramatically in the last five years, from 136 million to 228 million. IDC does not track what portion of those computers are capable of running the new operating systems.

"If you look just at the debut [of Vista], even accounting for overall organic growth in terms of the PC market, it shows really strong consumer response right out of the gate, which is good," Kutz said. "And we're really encouraged by that."

He wouldn't say how the initial sales compared with internal expectations "simply because as soon as you use that word then you send bells ringing in the financial analyst community.

"But ... we've been on the record saying that we think Windows Vista is going to be the fastest adopted version of Windows ever and we're totally on track to do that."

A year ago Michael Sievert, corporate vice president of Windows marketing, predicted that Microsoft would sell 200 million copies in its first 24 months on the market. At February's sales pace, it would reach that goal by the end of the year. However, sales in the first month after launch are typically boosted by pent up demand.

Sievert is scheduled to speak to investors today at 12:30 as part of a Merrill Lynch conference call.

In terms of size and scope, Microsoft compared the launch of Vista on Jan. 30 to the launch of Windows 95 more than 10 years ago. The company did not provide a comparison of Vista's initial sales pace to that of Windows 95.

Kutz said the 20 million licenses sold in February includes sales to PC manufacturers who install the software on new computers, retailers who sell packaged software that users install on existing machines and the company's new Express Upgrade program.

One key metric financial analysts are watching is whether people are buying the costlier, higher-end editions of Vista. Kutz gave no specific figures, but did offer anecdotal evidence.

"From what we've heard from retailers and from our partners in the PC maker community the premium editions are selling extremely well," he said.

Microsoft shares were down 22 cents, less than 1 percent, to $27.80 in trading on the Nasdaq before the news was released this morning.

Benjamin J. Romano:

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