SAN FRANCISCO — A big question about Microsoft sales in 2010 is when businesses are going to upgrade their PCs to Windows 7. The new operating system’s sales so far have been driven by consumer buying since Microsoft began selling the software on Oct. 22. Most business customers have not started upgrading to Windows 7.
Intel Chief Financial Officer Stacy J. Smith said he is hearing anecdotally that businesses are evaluating upgrading their PCs.
“I put it in the anecdotal evidence that is starting but not necessarily data-based [evidence],” Smith said during a Q&A session at the Goldman Sachs technology investors conference Tuesday. “That leads me to a conclusion that there is a refresh out there. The average age of the [business] PC is in excess of four years. As you get to that point, the cost to keep that computer in the environment is more expensive than to refresh it.” By “refresh,” Smith means buying a new PC with Windows 7 to replace the older PC with Windows XP, not spritzing it with rosewater.
Other highlights from the Intel session:
- Smith appeared positive about Intel’s financial performance this year. His biggest concerns were regulatory. “I worry about government screwing us up” with regulations, Smith said. “I worry about China pulling back. It’s more on the macro side then it is on our execution.”
- On the Chinese market, Smith said the market is hitting its “sweet spot” with PC adoption. “Per-person penetration rate has now crossed over 10 percent and is approaching 15 percent. You look at that compared to mature markets, which is 80 percent. … We’re in that sweet spot. The infrastructure is built out. … China will be our largest market at some point in the next few years.”
- Smith also looked at how fast IT spending fell in the recent economic downturn, compared with the dot-com bubble bursting at the turn of the century. “If you go back to when dot-com bubble burst, it took six quarters for supply line to react,” Smith said. “In this [downturn] that 6 quarters looks like it was two quarters. You saw some very fast action.”
Here is a link to the Webcast of the Intel session.