Although Microsoft’s product line is now diversified into many areas, its core business is still its operating system.
According to Bloomberg’s earlier report on Microsoft’s desire to encourage users to upgrade to more expensive versions of Windows 7, operating system software accounts for 28 percent of the company’s $60.4 billion in annual revenue and is its most profitable business.
Collins Stewart analyst Sandeep Aggarwal projected that Microsoft could rake in as much as $1.5 billion in additional revenue from the release of Windows 7. ZDNet reported that, of that $1.5 billion, nearly two-thirds of it will come from upgrades--which we assume means licenses from owners of Windows XP and Windows Vista.
Aggarwal said that as much as $680 million could go Microsoft’s way if the company manages to increase the number of ‘premium versions’ of Windows 7 sold to users. This relates heavily back to yesterday’s report on Microsoft’s aim to profit from netbook users wanting to upgrade their Windows 7 to something beyond the Starter Edition.
Finally, Aggarwal chimed in on the most hopelessly often discussed Windows 7 topic – the release date. While Microsoft stands firm on its original target of an early 2010 release, many signs are pointing to a date sometime later this year. The analyst believes that Microsoft will finalize the code for Windows 7 by June or July, giving the industry ample time to push for the holiday season. Of course, we won’t know for sure until word from Microsoft.