No Coal in the Holiday Stocking, After All?

By contrast, desktop PC sales declined nearly 7 percent. However, Stephen Baker, NPD's vice president of industry analysis, dismissed the change as insignificant.

"The decline in desktop sales is more likely because of a drop in good promotions than anyone waiting for Vista," Baker said. As for the holiday's first big sales period, ended November 25, "Vista was less than not important," he said.

PC sales started off strong in part because of increasing demand for notebooks and compelling pricing. The latter is most important during the holidays.

Early holiday shoppers are "buying based on price," Baker said. "They're not the kind of people to obsess over an operating system that comes out in two months."

The sales surge for notebooks is starling. NPD ranked notebooks as number two of the top-five revenue producing categories, with 9.8 percent dollar share. Top category LCD TVs had 13.2 percent revenue share. NPD reported that average notebook prices declined to $701 from $852 a year earlier.

The deals are compelling. For $699, after $300 in instant discounts or electronic rebates, CompUSA offers an Acer Aspire notebook with AMD Turion 64 X2 Dual-Core Mobile processor, 1GB of RAM and 120GB hard drive. Best Buy has a Compaq notebook with Intel Celeron M processor, 512MB of RAM and 100GB hard drive for $549, after a $150 instant rebate. Both computers come with Windows XP Media Center Edition.

The early sales results contradict analyst predictions that Windows Vista's holiday miss would pinch Microsoft retail and PC partners. Baker dismissed gloom-and-doom predictions, simply because of the bargain-hunting clientele that catches the early sales.

Over the last couple months, I informally polled PC manufcaturers about Windows Vista's holiday miss. While none would go on the record, privately most computer manufacturers expressed exasperation about holiday prospects. "The position is tough. We're gonna have to give away our margins in discounts [to drive sales]," said one unnamed PC marketing executive.

With 20 days to Christmas, final sales prospects remain uncertain. Even if notebook demand remains high and prices go even lower, desktop PCs may continue year-over-year sales declines. Meanwhile, adjacent categories--software and peripherals, for starters--are candidates for Windows Vista hard luck. Windows Vista would have created sales pulls for many PC categories. The notebook is just one product category.