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Microsoft Office 2007 outperforms Office 2003

Office gets boost from new Mac users

Office 2007 on Windows is selling at roughly double the rate its predecessor, Office 2003, did in its first months after release, according to market research firm NPD Group. This forms a sharp contrast to disappointing sales of the Windows Vista operating system, and the continuing strength of Windows XP.

NPD analyst Chris Swenson said yesterday that part of the reason for Office's success is people switching from PCs to Macs.

Microsoft Office 2007: the definitive review

"Any way you cut it, the first six months, or a similar January-through-July period, or the first week or even the first month [of sales], no matter how you slice it, Office 2007 is selling much better than Office 2003 did," said Swenson.

And even though Office 2004 for Mac is far from new, Swenson said, it's also contributing to Microsoft's suite success. "Mac Office represents about 20 percent of all Office sales in US retail. At first that seemed really surprising, but if I'm switching to Mac, there are a few key [software] products I'm going to buy, and Office is one of them."

In other words, even though they're leaving the PC behind and abandoning Windows, newly-minted Mac owners are still shovelling money at Microsoft, Swenson said.

"Microsoft's still making the Office sale," he said.

Swenson's data comes from NPD's monthly reports of software sold at major US retailers such as Best Buy and CompUSA, as well as data from the more than 180 Apple retail stores, and a few online sellers, including Amazon.com and Buy.com.

Mac switchers aside, Microsoft's unheralded success selling Office - Swenson noted that it typically gets buried by the bad news about Vista's retail performance - stems from smart pricing. "The most important thing is the pricing of Home and Student 2007," he said.

"Eighty percent of all copies sold at retail are this edition," said Swenson. "When Microsoft came out with version 2.0 of [this package], they started seeing increases not only in unit volume, but also in dollars." Swenson was referring to the licensing changes Microsoft made to the student-priced edition in 2003 that bumped up the number of allowed installs in the same household from one to three.

Second on Swenson's list of reasons for Office 2007's success is something Microsoft has little control over. "Part of it is clearly installed base," he said. "There are roughly 100 million more PCs now than there were in 2001, so even if the same percentage of users buy Office, sales go up."

Office Ultimate 2007 includes Word, Excel, PowerPoint, Outlook, Access, Publisher, OneNote, Groove and InfoPath.

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