Analysts split over Vista launch date

By Colin Barker
Posted on ZDNet News: Oct 6, 2006 12:37:00 PM

Goldman Sachs analyst Rick Sherlund circulated a note to clients on Wednesday saying that the final beta version of Vista will be sent out later this week, leaving Microsoft set to hit its end-of-year deadline.

"We had been sceptical of the launch schedule, but the team seems to be making great progress in addressing issues of performance, reliability and compatibility," wrote Sherlund, according to Reuters.

But analysts at Gartner believe Microsoft could benefit by delaying Vista until Easter.

Gartner took issue with the timing of the Vista launch earlier this year, suggesting that ideally it should have been out in plenty of time for the crucial holiday season.

In response, Sherlund said the suggestion that Microsoft will offer coupons that PC makers can give away for a free upgrade to Vista may help reduce the negative impact of a later launch.

"This might help offset the apprehensions in the industry that the January launch of Vista...will negatively affect PC demand in the seasonally strongest holiday quarter as consumers hold off for the new product," Sherlund wrote.

Gartner also argued in September that a number of factors make it more likely Microsoft may delay the launch of Vista until at least May next year.

The reservations were laid out in a research note, titled "Events aligning to make Vista delay more likely," and take into account market, political and industry issues that the researcher said are beginning to stack up against Microsoft. The most significant are the ongoing legal battles between Microsoft and the European Commission.

Both Gartner and Goldman Sachs broadly agree that there is no technical reason why Vista should be delayed. Divergence of opinion between the analysts focuses on issues like the role of the European Commission.

On Wednesday, it emerged that Microsoft has appealed the 280 million euro ($350.8 million) fine imposed in July by the European Commission because the software giant failed to comply with its landmark antitrust ruling.

A delay for Vista now would be convenient for Microsoft, Gartner analyst David Mitchell-Smith argued, because "when people start complaining about the delay, Microsoft can reasonably say 'don't blame us' and point the finger at the EC."

Microsoft is "probably getting a bit tired" of the European Union's stance, suggested Mitchell-Smith. "It's not unreasonable to think so."

Mitchell-Smith also noted that Microsoft wants to avoid further litigation, as it is already facing legal action by Symantec and Adobe Systems.

"While it would go far to settle corporate lawsuits," Mitchell-Smith argued, "it is less likely to be able to resolve legal action by the EC as easily."

Colin Barker of ZDNet UK reported from London.