PriceSCAN Blog

Missing in this analysis is the downside of telling one's customers they should start using their legacy software backup disks as doorstops. For those who use their computers for more than the occasional game of EverQuest, making sure that "old" office suite or design software still works is a matter of no small economic moment. This is all the more true for proprietary business or research apps. That Cupertino doesn't dominate the market might just be related to the fear that one might have to chuck a significant investment in time and money on the whim of a guy in a black turtleneck who turned down his iPod just long enough to declare your corporate IT environment not cool enough to be supported by his latest insanely great new product. Indeed, had Apple taken the place in the market Microsoft currently occupies, capriciousness might have been added to the familiar sins of the near-monopolist.
To be sure, if innovation proves too difficult under Microsoft's policies of backward compatibility, then Mac, Linux and even Google's web-based computing might well be the beneficiaries. New features offered by competing technologies will become compelling enough to prompt abandonment of legacy apps as the current Windows ages. Likewise, should Microsoft itself abandon backward compatibility and therefore place buyers in the position of picking their computing platform de novo, then the firm's longtime customers (captives?) may feel free to choose other technologies based on their specific features, eroding Redmond's vaunted market share. However, if maintaining Microsoft's current strategy just means consumers must wait until Microsoft's current target date of January 2007 to buy Vista (an enterprise version is slated for a November 2006 release), I have a feeling many will judge keeping their old applications worth a few months of delay.
In any case, with the consumer version of Vista delayed, demand for new machines may prove softer than many had hoped for. Retailers and manufacturers have been given enough of a head's up as to let inventory management allow for this disappointment; still, look for some computer price weakness as we proceed through the year and into the holiday shopping season.