Unit shipments of Office 2007 during the week that started Jan. 28 were up 109 percent over the first-week shipments of Office 2003, based on data that NPD collected from retailers including Amazon.com, Best Buy, Circuit City, CompUSA, Kmart, Office Depot, OfficeMax, Staples and Target. Port Washington, N.Y.-based NPD said the dollar value of Office 2007 sales was 106 percent higher than that of Office 2003, despite a small drop in the desktop software suite's average retail selling price to US$206.93.
"I was told by several retailers that sales of Microsoft Office greatly exceeded their projections," said Chris Swenson, a software analyst at NPD. He declined to disclose the actual sales figures that have been reported to NPD.
Swenson said sales of Office 2007 in the business channel during December, following the software's Nov. 30 launch for enterprise users, were also up compared with the first-month sales of Office 2003.
Unit shipments of Office 2007 were 61 percent higher among large value added resellers, such as CDW Corp., CompuCom Systems Inc. and Softchoice Corp., Swenson said. He added that the dollar value of sales by the VARs was 98 percent higher, partly because the average selling price for business purchases has jumped from $245.61 on Office 2003 to $301.33 on Office 2007 -- a 22.6 percent increase.
Swenson attributed the higher business pricing to Microsoft's "versioning strategy" for Office, which he said is helping the vendor upsell companies to more feature-rich versions of the software.
Microsoft also wants to upsell consumers, Swenson said, noting that more than 85 percent of Office's retail sales last year involved its discounted edition for students and teacher. With Office 2007, Microsoft has removed its Outlook e-mail client from that version, now called Office Home and Student, and replaced it with its OneNote digital notebook software.
Comparing sales of different versions of the same software can be tricky, though. Office 2003 wasn't encumbered by being released in the shadow of a concurrent operating system launch, as Office 2007 was with Windows Vista. But its release came just two-and-a-half years after the introduction of Office XP, and Office 2003 also debuted during the throes of an economic and IT spending slowdown.p>
The initial retail sales of Office 2007 may have benefited from pent-up demand on the part of early adopters who were forced to wait out Microsoft's development delays, Swenson said. However, they also may have been pulled down somewhat by the new ability to buy and download Office or Vista from Microsoft's Windows Marketplace Web site. Users of that site can download Office via a so-called digital locker operated by Circuit City, but NPD doesn't count those purchases as part of regular retail sales.
Swenson said Office 2007 sales likely will drop off from their first-week levels. But based on what happened with prior versions of Office, sales should pick up again and climb steadily over time, he predicted.
"Office 2003 had legs," Swenson said, pointing out that the U.S. retail market for office productivity software -- of which Microsoft has a 97 percent share -- grew 12 percent year-over-year during 2006. That was "a phenomenal growth rate, given how late it was in the Office 2003 release cycle," he said.
Computerworld (US online)
