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Samsung sees $370m Vista opportunity
"We are not suggesting 'don't buy a PC'... but don't delay the adoption of an operating system until you get a new PC"

By Reuters

Published: Friday 17 March 2006

Samsung sees a $370m market springing up later this year for computer owners who want to upgrade to Vista, Microsoft's highly anticipated operating system, but do not want to buy a new PC, a Samsung executive said.

Some 37 million personal computers have been sold in the United States over the last three years with a processor that is powerful enough to run Microsoft's Vista, according to Don Barnetson, an associate director of Samsung's semiconductor division.

"About 10 per cent of that 37 million represents potential upgrade candidates. They will buy, on average, about $100 worth of hardware, so that is [an opportunity of] about $370m worth of upgrade components in the US," Barnetson said.

To be upgraded, the machines need only to have certain hardware components improved, such as video and flash memory, which Samsung expects to sell in a bundle at retail.

"For $250, you can take your home PC and upgrade it to Vista" with Samsung's package, he said. "Or you can buy a new one for $1,000."

The business opportunity afforded by that low-cost upgrade option could expand as Vista is unveiled globally, he said, adding that while Microsoft would be involved in the marketing of the system, Samsung would be partnering primarily with retailers.

The vast majority of the world's personal computers run Windows operating-system software, and previous upgrades typically sparked a wave of PC upgrades, since older machines struggled to supply the power needed to run the software.

But overall adoption of Windows XP, the last major upgrade, introduced in 2001, was slow, Barnetson said.

A low-cost upgrade option could strike a sour note for PC makers like Dell and Hewlett-Packard, which would benefit from a rush to buy new PCs.

"We are not suggesting 'don't buy a PC,'" Barnetson said. "The PC upgrade cycle will continue. But don't delay the adoption of an operating system until you get a new PC."