Malkiel

Vetting Vista: Trouble Ahead for Microsoft’s Newest Operating System

It will be interesting to see how this logjam created by a near-monopoly provider putting to market an unready product will be broken. Users needing new computers can't put off their purchases forever, and there aren't many alternatives. Repairs or improvements to Vista (especially missing drivers) may not come anywhere near fast enough to stem the tide of complaint from buyers going forward who discover, like the early adopters, that their expensive hardware doesn't function properly. Any choice made by consumers, including staying with what they have longer, will set up important market conditions next year. The major choices look like this:

--Vista gets fixed as it goes: I give MS only a 30% chance of moving fast enough to make this scenario satisfactory.

--Consumers choose Apple: we shouldn't see this scenario come into play until October when their new OS comes out; if Mac sales noticeably increase before then, that would be significant and a reason to buy or hold the stock (without reference to the iphone).

--Institutions choose Linux: I don't see this happening in measurable numbers: if even 1% of the market is affected by this it might be significant.

--Microsoft extends XP shelf life--the Win/win (pardon the typographical pun) scenario for consumers and MS. I only give this a 30% chance of happening, but since it's best for all concerned you would think it would look like the obvious solution. If Microsoft announces something like this, or tweaking and repackaging a version of XP for home user desktops, that would be a justification for buying MS stock.