John Paczkowski

Recent Posts by John Paczkowski

Office 2010 Having Reception Problems Too

We’ve had an incredible reception to the new version of Office, Office 2010, SharePoint, Exchange.”

Microsoft CEO Steve Ballmer, July 12, 2010

Microsoft (MSFT) CEO Steve Ballmer describes the reception given to Office 2010 as “incredible,” but according to NPD, it’s been anything but. In the research house’s view, the first two weeks of Office 2010 sales have been “a bit disappointing.”

The latest data from NPD’s Weekly Tracking Service reveals Office 2010 units sold and dollars earned to be down from Office 2007’s initial two weeks of sales, though slightly ahead of sales trends for the aging software suite so far this year. That doesn’t mean it’s not a strong product–the reviews have been largely positive–just that it is having difficulty gaining momentum in a saturated market. A vast improvement over Office 2003, Office 2007 sold 10 million new copies retail during its lifetime. But folks who shelled out $399 to buy it three years ago aren’t feeling so compelled to do it again for its successor.

“Office 2007 was a radical new design that certainly helped deliver a lot of curious buyers and it was launched nearly parallel with Vista, adding a good deal of promotional activity in the software aisle, both of which likely helped drive initial sales of Office 2007,” NPD analyst Stephen Baker explains. “This time Office was launched during a seasonally slow period for PC purchases which have, over time, proven to be a have a strong impact on Office sales. The combination of these factors, plus the increasingly saturated installed base likely explains most of the initial weakness in sales of Office 2010.”

What about new challenges from online office suites like Google (GOOG) Docs? Surely they must play a role here as well? Not really, says Baker. “These products have little awareness among the mainstream consumer who is the retail boxed version’s primary customer. Over time it is certainly likely that we will see some slowdown in retail sales as consumers alter their productivity software habits, but that time is not now.”

So Office 2010 sales will be a bit slower to ramp up than those of its predecessor. At least until the PC refresh cycle really kicks in–and there are signs that that’s beginning to happen.

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