Hardware manufacturers such as Dell and Acer are today feeling the impact of the decision by Microsoft to delay new versions of both Office and its new Vista operating system.

During the past five days both Dell and Acer shares have fallen 1% while investment bank, Smith Barney, off the back of the Microsoft announcement has lowered its target share price for Asustek Computer from US$3.17 to US$2.70, with its rating for the company downgraded from “hold” to “sell”. Smith Barney says that due to Microsoft’s delayed launch of the consumer-version of its Windows Vista operating system; various sources indicated that the notebook market worldwide will grow at a slower-than-expected pace this year.

Analyst company IDC estimates Australians spend nearly $2 billion and purchased 1.06 million personal computers last year, a 40 percent jump in sales volumes from the 759 000 units shipped in 2004.

Talking to the Financial Review, Acer’s Australian Marketing Director, Raymond Vardanega, said the bad news meant the computer and notebook maker must now must boost sales in other areas to meet sales targets. “Look, its disappointing, but I guess the sky is not going to fall in. There’s enough price incentive for the consumer in the market for the time being. We’ll change some of the sales variables to sell larger screen laptops,” Mr Varganega said.

In Australia and the US, spin doctors for Microsoft have been downplaying the fact that up to 60% of the Vista code will be affected by various re- writes. In Australia, Microsoft’s PR company, Howorth Communications, has said that “Windows Vista is feature-complete, which means the code ‘writing’ process is in essence over. The next phase of development focuses on security, testing and fit-for-finish.” Howorth also say that no Xbox programmers are working on Windows.

However, it has not to date responded to requests to identify which Microsoft official will go on record to talk about Vista and the problems that Microsoft appears to be having with both the Windows operating system and the new Office suite of applications.

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