What buying Vista Ultimate means to Microsoft

Summary:Microsoft's plan to sell multiple versions of Vista--Basic, Home Premium and Ultimate--may already be paying dividends. The company, which reported fiscal second quarter earnings and provided plenty of items to analyze, said last night that it expects premium versions of Vista to represent 60 percent of sales in fiscal year 2007 (SeekingAlpha transcript).

Microsoft's plan to sell multiple versions of Vista--Basic, Home Premium and Ultimate--may already be paying dividends.

The company, which reported fiscal second quarter earnings and provided plenty of items to analyze, said last night that it expects premium versions of Vista to represent 60 percent of sales in fiscal year 2007 (SeekingAlpha transcript). That projection is above the 54 percent premium mix expected by Friedman Billings Ramsey analyst David Hilal.

So what does it mean to Microsoft if you buy Vista Ultimate instead of Basic?

Hilal estimates that for every 1 percent Microsoft increases the sales mix toward Vista Ultimate (say going from 1 percent of the total Vista sales to 2 percent) the company gets another $150 million in revenue for its client division. If you buy more Home Premium and the mix increases 1 percent it represents an additional $50 million in revenue for Microsoft.

Aside from the fun with numbers, it'll be interesting to see what flavor of Vista people choose. Hilal notes:

"We believe that Ultimate could do better than our 1 percent OEM license mix expectation, as consumers that use their home PCs for both entertainment and business purposes will be attracted to the breadth of functions that Ultimate offers."  

[poll id=46] 

Topics: Windows

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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