A few weeks ago, we sent to subscribers a warning that all is not well in techland, especially with Microsoft. It is now published on the blog, Looking at Technology: Caution is Warranted

That view turns out to be confirmed one Steven Ballmer, the
CEO of Microsoft. This past week, he "gathered together a group of
analysts who cover that software colossus to fill them in on the recent
debut of its new version of Windows, dubbed Vista, and what the future
holds in store for it and his company."

Alan Abelson addressed this very issue in the latest Barron’s. He notes that "Money, it turns out, can buy everything — except a boffo launch of a
new software product. The electronic retailers primed to accommodate
hordes hungry for Vista banging on their doors too often, instead,
found the thin ranks of their sales help outnumbering those of their
customers. Kind of like throwing a party and the guests all show up
disguised as invisible people."

Much of the big move off the lows in MSFT were based on the upgrade cycle in Vista — one that turns out to be noticably absent from the sales data:

"Now, we don’t want to give you the impression that Vista has been a total dud. It hasn’t been, except in terms of living up to extraordinarily extravagant expectations whipped up by all the hoopla. Despite the eerily muted opening day (all the noise pretty much was supplied by the company’s poobahs and their subalterns), sales should gradually gather strength as this year rolls on and next year, as well. But, pure and simple, it grieves us to say, Vista doesn’t stack up as the mighty blockbuster investors and geeks alike supposedly had been panting for."

A few other factors worth noting: Mr. Ballmer cautioned against anyone out there being "somewhat too bullish." He was distinctly wary that Vista might trigger a new PC boom. For those who like to argue that sector rallies precede fundamental gains, pray tell what the lack of buoyancy in the stocks of HP, Dell and Intel suggest as to the Vista adaption cycle?

Abelson goes on to quote from the very skeptical Fred Hickey as to what we should expect from the rest of Tech:

"Fred Hickey, proprietor of the High-Tech Strategist and treasured Roundtable member, had very low expectations for Vista and, as far as he’s concerned, they’ve already been fully met. As is not uncommon with Fred, he put his money where his mouth is, buying put options on Microsoft ahead of the product’s splashy introduction, and has the profits to prove it.

We chatted with Fred on Friday, and he remains very much of a mind, as he wrote earlier this month in his newsletter, that Vista is "not an epic disaster for Microsoft" because "ultimately, businesses and consumers will resume their regular upgrade patterns and buy PCs that come pre-loaded with Vista." However, he’s convinced its effect on the "PC food chain" stacks up as another and very much sadder story.

Spurred in part by a study commissioned by Microsoft that concluded Vista would generate $72 billion in related hardware, software and service revenue, Fred relates, what he calls the PC food chain — distributors, resellers and solutions providers — went wild and hugely overbuilt in preparation for a post-Vista release boom that is clearly not coming.

The result, sighs Fred, is that through the length and breadth of the industry, from semiconductor companies to electronic retailers, there has been a massive inventory build-up — which, he contends, is a prelude to a disaster. He suspects that the first tremors of real trouble will be felt a few weeks hence, when some dismal earnings forecasts begin to seep out.

What confounds him and could greatly exacerbate a collapse in techs is that investors continue bullish on them despite six long years of underperformance by the sector. Besides Microsoft, his most recent published list of stocks he’s negative on includes Best Buy, CDW, SanDisk, Texas Instruments, Lam Research, KLA-Tencor, Nvidia, Research in Motion, Apple, Microchip Technology, STMicroelectronics, Amazon.com, International Rectifier, Dell, Novellus Systems, Xilinx, Motorola, Applied Materials, NetLogic Microsystems and Fairchild Semiconductor."

Ouch.

>


Source:
Goldilocks in Drag
ALAN ABELSON
Barron’s February 19, 2007   

http://online.barrons.com/article/SB117167292470711833.html

Category: Corporate Management, Earnings, Investing, Markets, Technology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

40 Responses to “The Great Vista Inspired PC Boom (or not)”

  1. S says:

    Fred mentioned SNDK.

    SNDK came out with a well timed warning last night after the bell. Funny how companies release horrible news on a Friday after the bell going into a three day weekend, yet great news is often released on Monday or Tuesday morning before the bell. Whatever.

    Anyway, SNDK, MU, and Samsung built way too much NAND capacity. They’re all drastically cutting prices to maintain market share. Gross margins are shriveling up. So SNDK announces it is planning to cut 10% of its work force, freeze executive pay and take other drastic steps in an attempt to retain market share and restore competitiveness.

    The after-hours trading in SNDK was telling. The stock closed the regular trading session within a couple of dollars of its 52 week low. My intitial reaction was investors would bid the stock up in after hours believing SNDK was taking aggressive steps to alleviate the inventory imbalance and get its cost structure in-line. Instead they dumped it and sent it almost $3 lower. Guess expectations weren’t washed out enough.

  2. Lori says:

    Microsoft could change this. They could stop fixing the holes and viruses in their old system, forcing us to upgrade to keep our systems from crashing. Let’s hope they dont think of it. After how they treated Netscape, and how they polluted Java, I wouldn’t put it past them.

  3. wally says:

    I EXPECT a computer to come with an operating system, and vice-versa. An operating system is not a separate purchase, a new toy, or an end in itself. I don’t buy a computer to marvel at the glory of its operating system; I buy it to run programs. The more invisible the operating system, the better it is.
    Since computers are now commodities, so are operating systems.

  4. Jim says:

    My IT knowledge is out of date but intuitively I suspect that ,when the technological history of this period is written, Vista will be seen as a bridge to far. One last attempt to have huge amounts of code on hundreds of millions of hard drives when most should reside on network servers. IMO, the next “big picture” in IT will be an open source, network resident operating system.

  5. trader75 says:

    My wife just got a new computer at the office w/ Vista. She has been cursing Microsoft like a sailor ever since.

    I heard, too, that Dell was selling Vista on lower-priced laptops that failed to meet the minimum hardware requirements… and that even computers in line with the requirements have issues with running slow.

    After a quick check of Dell.com, it appears they are now offering a choice between Vista and XP for their latitude notebooks. Hmmm.

    Wonder how many people who heard bad things have said “forget that bloated Vista crap, give me XP.”

  6. esbisworried says:

    Lori…msft recently announced that extended support for xp will continue through early ’14. Since security support is the only thing that you need from msft for a home system you are wise to get an xp system because…the vista aero interface is a silly gimmick, and when a silly gimmick requires half of your system resources it becomes a stupid silly gimmick, and that is exactly what vista with aero is, a stupid silly gimmick.

    Incidentally, anyone here know of a major (or not so major) retailer still selling some remaining xp desktops??? Would like to pick up one or two myself.

  7. “Wednesday June 16, 2004: Fred Hickey writes the respected High-Tech Strategist Newsletter. He’s a bear. Always has been. This month’s newsletter is more persuasive than usual. He argues:

    + The housing bubble is burst.
    + The Chinese economy is slowing down.
    + The stockmarket has soared from its low of 14 months ago. Nasdaq is up a “massive” 55%. Dow is up 2,700 points. That’s more than enough.
    + There is so little fear in the market that it’s at a near decade low. This is bad sign. [Vix last night was 15.]
    + There is inflation. The government “has utilized all kinds of creative means … to hide the resulting rise in inflation in the official CPI releases. They’re using imputed rents (up 2%), instead of actual house prices (up 8%), reported medical care costs at just 2%, versus the real double digit increases seen in health insurance.”
    + The Department of Labor’s Bureau of Labor Statistics (BLS) is essentially faking its statistics for this election year. Asks Hickey, “What’s different in this world that has caused this [recent] turnaround in job creation in just a matter of months (other than the upcoming election)? Not much. What has changed is the BLS’s estimate of new jobs from a category called Net Birth/Death adjustment. Essentially, the BLS has adjusted upward (dramatically) its estimate each month of the number of new jobs created from its estimate of the number of new businesses created (also known as births). The BLS describes this “estimation procedure” on its website (Click here.) The BLS also serves up the following caveat there regarding the birth/death estimations: “The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend.” Points out Hickey, “Over the last four months of 2003, the jobs estimated from the birth/death model totaled to 170,000. Over the past four months in 2004, the estimate is 733,000, or 71% of the 1,030,000 jobs the economy has supposedly created.” Hickey sums this fakery up: “The job numbers reported each month are supposedly counted numbers. At least 71% of the recent new jobs created clearly are not.”
    + Last year’s back-to-school sales of PCs were boosted by tax rebate checks. That won’t happen this year.
    + He concludes, “Some of the smarter money is likely getting out, while the getting’s good. The current stalemate [see my column yesterday] may be the calm before the storm. The storm will come when it becomes clear to most that the economy is once again faltering, the secular bear market has returned to complete its work, the purge of excess tech capacities and inventories has resume and overpriced tech stocks are not a safe option for one’s retirement funds.”

    Hickey has large positions in short-term government bonds of Australia, New Zealand and Canada, which he intends to hold until maturity. He also has large positions in Newmont Mining and Pan American Silver [neither of which are doing especially well.] He also has puts on STMicroelectronics, Texas Instruments, Fairchild Semiconductor, Qualcomm, Research in Motion, Dell, CDW, Capital One and eBay.”

    LMAO!

  8. “Wednesday, February 9, 2005: Hickey’s recommendations are predictably bearish. Fred Hickey writes the High-Tech Strategist newsletter. What makes his bearish predictions more credible this time are his extensive research and his quoting company after company reporting downturns in sales. There’s too much detail for this column. Suffice, Hickey owns put options on Best Buy, CDW, Dell, Hewlett-Packard, Lexmark, Amazon, eBay, Google, Applied Materials, KLA-Tencor, Texas Instruments, Research in Motion, Intel, Countrywide Financial, Capital One and IBM.”

    still bearish. lol………..

  9. K-Dawg says:

    If we go back:

    - Windows 95 was a huge leap from Windows 3.11 going to 32-bit.

    - Windows 98 to Windows XP, again a huge leap and completed the transition to the more secure NT file structure.

    - Windows XP to Windows Vista. Meh….maybe for the security enhancements.

    Vista just seems like a layover much like was Windows 98. Then it’s on to the next really big thing. But this cycle looks to be much longer.

    Hopefully, by the next cycle open-source OS’s will be de rigeur.

  10. “Shorts which Fred Hickey has: His October 2005 newsletter shows he is short (or has puts on) Intel, Best Buy, CDW, IBM, Google, KLA-Tencor, Netlogic Microsystems (NETL), Dell, Amazon, Apple, Texas Instruments, Business Objects (BOBJ), Hyperion Solutions (HYSL), Toll Brothers (TOL), Goldman Sachs, Lehman Brothers (LEH), Capital One Financial (COF) and Countrywide Financial (CFC). His largest put option is Research in Motion (RIMM), whose management has recently become desperate — and announced a big share buyback. I say “desperate” because it means the poor management doesn’t have the imagination to think of ways to improve their product. I wish they’d ask their customers (like me). I’d give them 734.”

    Wow, still short and still buying puts and the end of 2005….

  11. Robert Coté says:

    “Vista.” Is that Esperanto for “Windows ME?”

    When the next new operating system comes out from Microsoft it will have a new filestructure, HIL core search engine, permissions and user level installs. What we have here is a major UI upgrade to Server 2003 or if you wish, a mashup of XP and Server.

    The only modern parallel that comes to mind is the US auto industry just prior to the Japanese invasion.

  12. Teddy says:

    Larry, sometimes when Ableson writes about and quotes people in his column, it takes awhile for things to play out. Someone correct me if I’m wrong, but I think he wrote a column about 3 years ago concerning Samsung entering the flash memory market and creating a glut. Also, if “memory” serves me correct, I think around 1995, he wrote about Conseco Insurance and creative financing. Darn if that stock didn’t double or triple in the next 4 years before declaring bankruptcy. And of course, he was writing about the stock bubble for quite awhile before it finally cratered. In any event, I think you would agree that Ableson is a very funny and talented man.

  13. wunsacon says:

    If Google online doc usage reaches a critical mass where the network effect makes it explode, we might see the network computing model really take off. That will break the OS/Office stranglehold (unless MS gets people to quickly migrate storage online).

    After that, the most powerful computers at home will be our gaming consoles.

  14. muckdog says:

    The bottom line is that there is no compelling need to upgrade to Vista. Windows XP is stable and until the PC gives out, most folks won’t get a new PC that comes with Vista…

  15. dblwyo says:

    We used to call network-resident OS’s time-sharing but decided to rename it to client-server to be current and cool. Oops missed a decade or two. Vista is really bloatware which requires a huge new machine but doesn’t deliver significant new functionalities. That it’s 5 years late and all the cool, i.e. major enhancements, got stripped off by bad execution should be scary to lots of people in Redmond. Linux is capable today of, and does, the server role and the desktop but is limited by geekiness and market barriers in the latter. However Vista’s short-comings open up all sorts of opps. If I were running an IT shop I’d be seriously looking at migrating asap to a Linux/Linux or Linxu/Max OSX server/client environment. Particularly given the power and generalities of OpenOffce.

    As an investor you might want to ask if MSFT has gotten the scelrosis disease of not being able to get out of it’s own way. It certainly has had major problems opening up news lines of business. And it’s core has been under threat which may accelrate as above.

  16. V L says:

    Re: Vista

    Finally, I am running Vista Ultimate 64-bit on my recently build (ASUS motherboard, Intel Core 2 Duo – 2.4GHz x 2; 4 GB RAM; Radeon X1950) computer. Installation was a breeze. It is pretty and sleek, fast and stable, and it is definitely better than XP and Mac OS. Internet seems a bit faster (Vista coding is optimized for broadband, XP’s was not). Bottom line, everything seems to be rock solid stable so far and it is a great purchase at a great price ($200 for OEM Vista Ultimate 64-bit). It just kicked Mac OS (and their hardware monopoly) to the curb and down the drain. It means aggravation from Mac fan boys will soon cease.
    Was it worth it? Yes!

    Re: Microsoft Office 2007

    All programs of the suite are incredible. Its new interface (I like black in particular) is amazing and easy to use, preferably on screens 17+. The new user interface makes creating documents fast, and improving the layout and quality of your documents even faster. Overall, a great upgrade from office 2003!
    Was it worth it? Yes!

    Re: SanDisk

    SanDisk seems to be synonymous with huge reliability problems! Both of my 4GB Cruzer U3 Smart died within a month of purchase. I will not touch SanDisk products or SanDisk stock for a while.
    Was it worth it? No! I want my $250 back!

    As far as all the tech stocks, I think all of them are overvalued. I would trade them but I would not hold them.

  17. donna says:

    I thought the Vista interface WAS Mac OS….

    ;^)

  18. Bob A says:

    People will buy new Windows computers the same way and for the same reason as they always have… when the old one breaks or becomes so old it doesn’t make sense to keep using it because the new ones are cheap and many times faster. This whole idea that there’s gonna be some huge stampede to upgrade old computers to Vista is a fabrication (and/or delusion) of people with big positions in Microsoft stock. Microsoft told us .NET was going to revolutionize the Internet… still waiting for that to happen? Or how about ‘The new MSN’. And how about the Zune. That’s a hot property. When are people gonna realize that Microsoft is about as exciting and innovative as the Postal Service and there’s not much that can change that.

  19. Eclectic says:

    BR… some questions, and I’d like to hear from everyone that will contribute as well, but please also no tech jargon, no ifs and buts, and no speeches. And, Al, if you’re on board, you’re welcome to toss a few rings too.

    I think I remember you (BR) saying you used both a Mac and a PC, correct?

    If so…

    Why do you have the PC? (BTW, anyone not owning a Mac is still asked for answers to core questions)

    If it’s for something singular and specific that is only available with a PC, could you function without the PC?

    Are you going to upgrade it to Vista or buy a new computer with Vista already installed?… or just keep it as is?…. How long, if to keep it?… or are you planning to never use Vista at all?

    Are there any things that you must use a computer for that are not available to you on your Mac?

    Of all computer purchases over the next 2 years, what’s your opinion of the % that will be new Macs vrs the % that will be new PCs?

    Do you have any friends or associates in the investment industry (others, your own industries) that don’t use PCs at all?… and that means without any exceptions of use. What % of your friends and associates don’t use PCs at all?

    What’s your opinion about whether they will or won’t upgrade to Vista?… Opinion as to when?

    If someone tossed your Mac and PC in a dumpster today and you could only repurchase one type, but not both, during the next 6 months… which would you buy first? If the answer is a PC, would it have Vista or XP?

    …kill the dumpster dump theme, and resume…

    If your children (or any children you know and care about their best interests) are middle-school age or in higher grades, if they did not have access to PCs for the remainder of their educational years, but did have access to Macs, would they suffer any detriment in your opinion?

    Would you be willing to tell us the day you upgrade to Vista or buy a new PC with it installed?

    What % of all computer users do you anticipate would have difficulty, financially, purchasing a new computer, regardless of type, Mac or PC?

    Which will be higher through the remainder of 2007, new PC sales by % or the 10-yr-T highest yield?

  20. dave says:

    I think the people most willing to pay for the advanced features of Vista bought a Mac several years ago.

  21. dave says:

    BTW, I have 4 PCs in my house and I am not about to pay $159.00 + tax four times.

  22. angryinch says:

    Good to see Mr Larry Nussbaum back posting nonsense. Who doesn’t need a hearty laugh?

    This time, he delivers the infamous “Nussbaum LMAO” to Fred Hickey because Hickey wrote that he was short nine stocks in June 2004. Apparently Mr. Larry Nussbaum thinks this is a laff riot because, as we all know, the market is ever-so-much-higher today.

    Yet let’s review the stocks that Hickey had identified as short candidates. Hmmm….turns out that 8 of the 9 didn’t do jack squat for two years after being identified as poor performers by Hickey. A laff riot indeed:

    —QCOM was at 34. A year later: 32. A year after that: 32. LMAO.

    —DELL was at 36. A year later: 35. A year after that: 20. LMAO.

    —STM was at 21. A year later: 16. A year after that: 15. LMAO.

    —FCS was at 17. A year later: 15. A year after that: 16. LMAO.

    —CDWC was at 63. A year later: 56. A year after that: 50. LMAO.

    —COF was at 71. A year later: 72. A year after that: 70. LMAO.

    —EBAY was at 44. A year later: 34. A year after that: 23. LMAO.

    —RIMM was at 61. A year later: 68. A year after that: 61. LMAO.

    The only one that Hickey got wrong was TXN. However, since Aug 2005 (over 18 months ago), TXN has gone nowhere.

    Good to see that your attention to detail is as strong as ever, Mr. Larry Nussbaum. LMAO!

  23. V L says:

    “I have 4 PCs in my house and I am not about to pay $159.00 + tax four times.”

    Dave,

    You do not have to pay that much!

    I am sure there is somebody in your household who will qualify for discount Academic Software for Students, Teachers & Staff (all you need is a copy of Student ID)
    (Academic version is Full-version software, the only difference you pay less.)

    For example, Windows Vista Home Premium Upgrade is $69.85 and I think you can legally install it on up to three computers within your home (check it with MS to make sure).

    In addition, if you buy it online you will not pay a sales tax and you can find some sites with free shipping.

    In short, if you are creative, you can have this wonderful OS legally running on three of your home computers only for $70.

    Check it out: http://www.campustech.com/c/campust/store.html?id=CJpjXa2U&mv_arg=MSFT&mv_pc=19

    P.S. We have too many layers and layers of taxes in this country: first, we pay income taxes then we pay real estate and sales taxes, then we pay death taxes, etc… Some liberal lunatics want us to pay even more taxes like additional “carbon” tax and “fresh air” tax. God Bless America!

  24. “Yet let’s review the stocks that Hickey had identified as short candidates. Hmmm….turns out that 8 of the 9 didn’t do jack squat for two years after being identified as poor performers by Hickey.”

    angryinch: Mr Hickey has been bearish for 4 years and dead wrong. His list of companies that he has been buying puts on is much larger than those posted. But, based just on the “8 of 9″ mentioned that he bought puts on (not short) that “didn’t do squat”, he has lost money on them all.

    Unless, of course, you are implying that his puts went up in value as the underlying stocks did not go down? Now, that’s worthy of a big “LMAO!”

  25. angryinch says:

    Oh, Mr. Larry Nussbaum! What a funny gal you are!

    If 8 of 9 stocks went down in the two years following Hickey’s short recommendation in June 2004, my guess is that Hickey probably made money on those bets.

    Only a man of searing insight like yourself could come to the opposite conclusion.

    That said, put-buying is a tricky proposition. You need to get both the direction and timing correct or you can’t make money. Of course, the same is true with calls. So I have no inside knowledge of whether Mr Hickey did well with his options plays or not.

    However, since 8 of the 9 stocks in question dramatically underperformed the broader market in the 24 months to follow, I’d say that Mr. Hickey’s analyis that these stocks were “ones to avoid” was spot-on.

    If I were you—and thankfully, I’m not—I would consider curbing the excessive use of the Internets shorthand “LMAO”.

    For someone who is as big an arse as yourself, laughing said arse off might be injurious to your health.

    Just looking out for ya, Lar.

  26. Patu says:

    ablemable was right once in twenty years, the year 2000, not a bad record…ehhh?

  27. sn says:

    Some questions have been raised re: using both a PC and a Mac. I currently use both and in the future will restrict myself to PC use only. The Mac OS (X) has a number of annoying features but the most severe and damaging problem in using both platforms is the lack of software compatibility between Macs and PCs. For example, MS Office is mostly compatible but not quite, with the Mac version running ridiculously slowly and failing/crashing at those critical moments just before deadlines (Apple tech support: “of course MS Office is slow and unstable on the Mac – didn’t anyone tell you?”). Statistical software that I use also does not translate very well. I use LATEX on my PC but haven’t tried it on the Mac – I doubt the files would translate properly. New US federal government procedures for grant applications requires the use of software for which no Mac version is available. Even if it were, swapping files between the two platforms would just be asking for trouble.

    Anywho…that is my experience (N=1).

  28. Eclectic,

    I have a Dell network in the office for a few reasons: ILX and Bloomberg are Windows only; Its the standard for my industry; We have a full IT support team on staff.

    The Mac at home is easier to use, fairly stable, and I can troubleshoot it myself — OS X has never needed much help from me — I am overdue for a major cleanup, and may simply do a reinstall to clean it up a bit, and deal with my fan issue . . .

  29. Brian says:

    I find it odd that someone would think Mac OS X wouldn’t handle LaTex. LaTex was developed for Unix systems first and development continues to be centered around Unix, with Windows support added afterwards. Because of OS X’s underpinnings, it runs the Unix LaTex software natively, and there are may packages that offer very nice LaTex front ends and clients for OS X.

    Additionally, the US Government grant applications use the PureEdge software which IBM now owns. IBM has released an OS X version of the software, though it is still considered beta software.

    I have been using Windows, Mac, and Unix operating systems for years and now use my OS X machine almost exclusively as my home and work machine. I have trouble finding any task I cannot do on my Mac.

    The use of a specific operating system is a personal choice – use what you prefer and what works best for you. As such, I find statements such as “I use Windows because I like it better” to be much more credible and respectable than statements of deficiencies in competitors that actually do not exist. To me, this reeks of fear, which to me is yet another signal of the coming fall of the dominance of Microsoft.

    I do have a somewhat funny story on the subject of Microsoft and file sharing between other operating systems. I purchased an external hard drive to use as a backup drive for a number of computers I have around (some of them are not networked). The drive was pre-formatted as an NTFS drive. NTFS is a fine filesystem, except that Microsoft has kept the specifications proprietary and thus NTFS drives are read-only on many non-Windows machines without additional software costs. My response was that I would simply format it as FAT32 because I know every operating system in the world can handle FAT32. Well, it turns out that Windows will refuse to format a hard drive larger than about 20GB as FAT32 (essentially all hard drives now on the market). Who will format a large drive as FAT32? Mac OS X. How’s that for file sharing between Windows and Mac?

  30. Eclectic says:

    Thanks BR for the response. I appreciate your frank objectivity and the complexity of analysis in very nearly everything you say. In the spirit of that, let’s have a wee bit of intellectual fun with a review of my initial questions and your response. I’ll generally reprise my questions with a mark (*) followed by my discussion of the question and, where appropriate, what seems to have been your answers, either directly or derived logically from things you’ve stated before. And, too, let’s not forget to invite AA, although he may be wrapped up doing a crossword puzzle at the moment.

    *I remember you saying you used both a Mac and a PC, correct?

    You explained partially what we already knew, that you had a fan issue with a Mac (of no consequence to my discussion now) at home and used PCs at work. However, it seems that the work related response is a bit stronger than just as it relates to preference, since your primary mission/employment doesn’t leave you much opportunity to use Macs at work. If that’s incorrect, tell me. I know that superior back office tech people (that you rely on at work, as do I) can do almost anything… but evidently from what you say they can’t get you on ILX and Bloomberg with a Mac.

    So, without the PC and any updates to it that either make your function dramatically more efficient (which you would doubtless do, from what we know about you – cutting edge, etc.), or without making any updates to software or hardware that you would need for minimum accessibility to your network, including ILX and Bloomberg, at all, you’d basically be back to carrier pigeons I suppose.

    I have a similar situation. I can remote to my company servers from home, but not with a Mac. So, if I wanted a Mac, at home it would be useless to me for one of my primary missions, one that I could not separate efficiently from other non-primary missions by buying a Mac and making room for it. And yet all my missions of every type I can do with my PC. I don’t also have a Mac as you do, but it seems that in once sense you and I are both still fat boy geeks in the sense of that Apple commercial, and we’re likely to stay that way for at least the immediate future … Cancel or Allow?…dee dee dee, d,d,d – d – dee dee dee, d,d,d – d. I tell ya, I just can’t get that jingle out’a my head.

    My company’s IT department will not expend the resources to modify the network to accept Macs (whatever all that would require). I’m not a decision-maker regarding this, but they simply will not do it, because they don’t find it necessary to support the small percentage that want to use Macs.

    I did wonder, since you have a Mac at home but didn’t comment on any PC at home, is there ever a time that you are home and need to access ILX or Bloomberg and can’t because you have a Mac, or do you also have a PC at home and just switch chairs to use the one that will get you ILX or Bloomberg?

    The point I’m trying to make is that you’ve told us of a sort of inclination to prefer the Mac, but your real absolute practical preference (unless you pull out the pigeons) seems to be a PC. That is, if your Mac(s) and PC(s) at home and work were together tossed in a dumpster and you could only repurchase one type, but not both, within the upcoming 6 months, you’d be down to the computer store getting one or more PCs tomorrow morning. If I’ve overstated the case, tell me so.

    *Why do you have the PC? If it’s for something singular and specific that is only available with a PC, could you function without the PC?

    I think we’ve covered that, and can safely assume the answer is “No, could not function without PC.”

    *Are you going to upgrade it (them) to Vista or buy a new computer with Vista already installed?… or just keep it as is?…. How long, if to keep it?… or are you planning to never use Vista at all?

    I fully understand that much of this is network IT related, and you have professionals as I do to make those decisions. However, I’m not a directing decision-maker with my IT folks, but I assume you are, so it would be reflective to have some general ideas about your thinking. I must say, Barry, from reading you and experiencing your enthusiasm and general intellectual joyfulness and playfulness, it’s beyond my capacity to believe that you wouldn’t have Vista at the absolute first occurrence of it being in your best interest to have it, not that you wouldn’t also have one or more new Macs. Am I correct?

    *Of all computer purchases over the next 2 years, what’s your opinion of the % that will be new Macs vrs the % that will be new PCs?

    This question looks, not to your preference for one or the other, which a logical observer of your blog recently might assume leaned toward Macs, but your objective opinion about how the sales will break out. I think the question is fair, don’t you?… since it’s a response to the primary topic that raised the question as to whether we’ll observe a PC increase in sales as a result of Vista’s introduction. It’s the whole theme of that previous topic, which in turn was the whole theme of the Abelson piece it was based on, which is in a sense the real front page every week of Barron’s, read by millions. We’re getting mixed reports about new computer sales.

    I don’t think we can know yet whether a reported 67% increase in computer sales for one particular week-over-week — and strong indications by Dell that in their particular case increased sales are coming from ‘delayed Vista availability buyers’ — will flow through to anything like the ‘boffo’ results for both computer and Vista sales that AA seems to indicate that MS expected. Maybe yes, maybe no… maybe Ballmer gets surprised… maybe no. Too early to tell.

    *Do you have any friends or associates in the investment industry (others, your own industries) that don’t use PCs at all?… and that means without any exceptions of use. What % of your friends and associates don’t use PCs at all?

    You’ve stated that PCs are “standard in my industry,” so I have to assume the answer is that 100% of your professional associates use PCs, regardless of whether they also use Macs. I don’t know of course, but I suspect that most, if not all, of AA’s professional associates, to include AA himself, do likewise, although he may inform us otherwise.

    *What’s your opinion about whether they will or won’t upgrade to Vista?… Opinion as to when?

    Contribute if you wish, but it would be silly for any reasonable and logical observer to assume that erudite, professional, monied, sophisticated Wall Streeters wouldn’t upgrade/buy new/modify networks/etc. to utilize PCs installed with, or upgraded to, Vista at the first availability that was to their best interests, and novelty can be the initial best interest they seek. To assume otherwise would be like… well, do you remember the Seinfeld where Kramer suspected the girl who eschewed lobster was doing so for some avant guard, socio-political reason (my characterization of what must have been in his head), but that she really wanted it?… so he camped out at the kitchen of the beachhouse overnight just to catch her sneakin’ down for some lobster. I think you get the point. Kramer was a lot of things, but he was a real genius at the observation of human psychology.

    *The question about: Would a child suffer any detriment if in their educational years they did not have access to PCs, but did have access to Macs?

    I have no idea what the answer to that is. I do know what the answer would be, were the child to experience educationally, comparatively, anything like a similar experience to you not having ILX and Bloomberg access with your Mac. I suppose this is an open question. I remember a time when Apple absolutely dominated the secondary education market, but I haven’t kept up with what the current status of that is.

    *Would you be willing to tell us the day you upgrade to Vista or buy a new PC with it installed?

    I must say that it would only seem reasonable to assume that, if you take the time to blog an opinion that Vista sales are below expectations for MS, if only by reinforcing the same information offered by AA, that either or both of you would also let us know if you began to perceive an increase that is beyond your own expectations.

    *What % of all computer users do you anticipate would have difficulty, financially, purchasing a new computer, regardless of type, Mac or PC?

    I suppose this question looks to the potential for market participants to afford any new computers in the upcoming weeks and months that would support a higher than expected level of total computer sales, whether Macs or PCs, based on economic conditions going forward, and that was also a major thrust of the AA/Barron’s piece. And, to my mind, we can’t know the answer to that question until the passage of yet more time than AA has allowed to accurately assess the MS study he quoted for build-out cap ex related to Vista’s introduction.

  31. V L says:

    According to technology, research group IDC Apple’s share of the PC market in the United States grew to 4.7 percent in the October-December quarter, up from 3.6 percent a year ago. (In addition, it was during times without Vista)

    No one seems to talk much about Apple Leopard, the next version of the Mac OS X. Hello! Where is it? According to comments made by Jobs in the past it was supposed to roll out about the same time as Vista, but it too has run into problems and won’t show up until late 2007, maybe even in 2008. There is no criticism of Apple for this delay? Why? Double standards?

    If Apple cannot at least double its small share during 2007-2008, it will abandon the Mac OS as a dead end. They have already removed the “computers” word from its name in preparation for Mac OS X funeral. (Apple Computers Inc. => Apple Inc.)

    Reasons as to why Mac OS X might be “Netscaped” by Mr. Softie within next 3-5 years:
    1. There is no real practical benefit from owning a Mac (other than it is cool, but this cool thing will not last)
    2. Because of Apple’s hardware monopoly (you cannot buy SONY, Toshiba, etc), it is more expensive to buy a Mac computer. If you are building your own computers, forget about the Mac.
    3. Apple Leopard OS is largely modeled after Vista with a few added features. Do you really think that Mr. Softie will be sitting and not adding new features to Vista so Jobs can catch them up? (Nuhhhh).
    4. Why would anybody buy a Mac knowing that its future is a huge question mark (unless you are an antiques collector)?

    Usually, I do not like predicting the future but there are good odds the Mac OS X might be “Netscaped” within a few years.

  32. jkw says:

    I am a student at one of the major technical schools in the country (consistently ranked in the top 4 in most engineering fields). People here practically laugh at anyone using Windows. The normal response to someone asking how to fix a problem with a Windows computer is “buy a Mac”. Most students only have Windows because it came on their computer and some games only work on it. Outside of the CS department, it is about an even split between Windows and Macs. It has gotten to the point where people no longer consider software if it isn’t cross-platform. In the computer science department, it is hard to find people that use Windows (Linux definitely outnumbers Windows in that department).

    The reason this is relevant is that these are the people who will develop the next big thing. These are the people who will be working for Google and other software companies. These are the people who will be starting new software companies. These are the people who will be running major corporate networks. And more of them use Unix-based OS’s than Windows. In a commodity market, their preferences will matter as much as the consumers’.

  33. Eclectic says:

    jkw,

    I appreciate your opinion and the quality of your intellectualizing:

    http://tinyurl.com/33k257

    Quoting from it:

    “SAN FRANCISCO (MarketWatch) — Hewlett-Packard Co. on Tuesday reported a 26% rise in fiscal first-quarter profit on [surging sales at its unit that sells personal computers and related hardware.]”

    [brackets] mine.

    Tell me… any of those computer sales Macs?

    Dee dee dee, d,d,d – d – dee dee dee, d,d,d – d – dee dee dee, d,d,d – d.

    I tell ya, I jiss can’t get-tat jingle out’a my head!

  34. Eclectic says:

    Turn it up LOUD! Before you link, set the volume *Loud*… you’ll enjoy:

    http://tinyurl.com/3cdjj6

  35. Eclectic says:

    P.S.

    I have no affiliation with any random links I may use for accent or effect.

    All in fun, my friends… all in fun.
    –Eclectic

    http://tinyurl.com/27e2c3

  36. Eclectic says:

    http://tinyurl.com/29trjz

    http://tinyurl.com/2p3au6

    …it’s because she wants to get laid.

  37. Winston Munn says:

    Is Vista doing so well worldwide that it offsets domestic problems? Earnings came in stellar, yet Dell’s non-compliant choice to offer consumers XP on new units seems a big slap in the face to Vista and its reception in the U.S.

  38. Eclectic says:

    http://tinyurl.com/38jnj4

    Oh, Winston… my son, my son!

    You are the only motor trucker so far that has come back. So, you get to enjoy some fun first, and then I’m going to challenge you.

    Are you ready, Winston?… Are you ready for the heat that Eclectic is about to put on you?

    It’ll be fun Winston, but I’m a spider and I’m about to sting you, inject venom, and salt you away for my babies.

    I’m going to ask you to defend the statement you made:

    “…yet Dell’s non-compliant choice to offer consumers XP on new units seems a big slap in the face to Vista and its reception in the U.S.” end quoting.

    So, define non-compliance for me if you can… tell me what it means… quantify it… source it. Can you?

  39. Eclectic says:

    Winston,

    There seems to be two elements to your comments: 1)- what the economic significance of Vista is and might be in the future (and thus whether the mainstream financial media have accurately interpreted that outcome), and 2)- whether Dell’s supposed non-compliance regarding Vista is of any real consequence.

    I suppose in the second element you may be referring to information found in stories such as these:

    http://tinyurl.com/yo73ho

    http://tinyurl.com/yq8how

    All I can say is that I tend not to put much confidence in any conclusions that have as their basis information derived from essentially a message board. I don’t know exactly if the authors of the referenced stories based their articles entirely on Dell’s “Idea Storm” initiative… but if they did and Dell’s supposed non-compliance regarding Vista is based solely on what Dell said on that Idea Storm site in response to posters, then I don’t think it’s much evidence of any significant non-compliance of Dell.

    There are links in the stories to Dell’s Idea Storm site if you want to take a look at some of the type of comments posted there.

    Most large PC manufactures will continue to sell machines with XP installed. They’d be foolish not to, and MSFT would be foolish not to authorize and license the OPSs to Dell or other manufacturers and their customers. I don’t think MSFT has ever said that conversion to Vista would be overnight and there’s still a very large enterprise market that’s just not completely ready for Vista yet, so the whole discussion of Dell’s supposed non-compliance is more-or-less simply inconsequential in my personal opinion. The net effect of it all is that Dell’s statements were mostly superfluous, since nothing of any real substance changed about how Dell (or other manufacturers) will react to their customers. They’ll all attempt to fill the demand as long as it’s profitable.

    Too, I think the introduction of Longhorn for servers may accelerate Vista conversion, but I’m no techie by any means.

    If the whole world rejects Vista and goes back to XP, I’ll admit I was way wrong, but simply having a delay in enterprise conversion to Vista is not currently any sufficient evidence of any such rejection. Too, it’s not entirely unlike when an auto manufacturer has good demand for last year’s model. They’ll get those sales and clean out the inventory for the new model. That’s basically what’s happening with Vista, although intellectual property inventory is of course quite different from the rolling stock type.

    My guess is that any substantial and sustained non-compliance might just be economic suicide for any PC manufacturer.

    Now, on the matter of whether PC sales are being boosted by the introduction of Vista. I think the jury is still out and that determination is going to be largely dependent on how the economy does over the near and intermediate term as Vista is continuously offered. And, no, Winston, I’m not sure that Vista’s success or lack of it would be the major driver, or that Vista success would offset weakness otherwise in the economy.

    Rather, I tend to think that Vista’s outcome would be driven instead by the economy itself. However, I will say that MSFT’s experience with Vista so far appears to be in line or a bit better than their own expectations and somewhat better than financial media expected.