Microsoft (MSFT) to Defer $200-$300M of Sales in Q2 Following Windows 7 Upgrade Option Program
Microsoft Corp. (Nasdaq: MSFT) today announced the start of the Windows 7 Upgrade Option program enabling consumers and small businesses to receive Windows 7 when they purchase a qualifying Windows Vista personal computer starting June 26, 2009. Under the program, designated PCs pre-installed with premium versions of Windows Vista will qualify for licenses of the equivalent Windows 7 product.
"There is a lot of excitement for Windows 7 in the marketplace today. However, many consumers need a new Windows PC for school, work or home before October 22," said Brad Brooks, corporate vice president, Windows consumer marketing at Microsoft. "So starting June 26th, any customer who buys a PC from a participating computer maker or retailer with Windows Vista Home Premium, Business or Ultimate will also receive an upgrade to the corresponding version of Window 7 at little or no cost."
In association with the Windows 7 Upgrade Option program, Microsoft will defer approximately 50% of the revenue from eligible sales under the program to the earlier of the program fulfillment date or the program's expiration. For the fourth quarter fiscal year 2009, Microsoft will defer an estimated $200 to $300 million of revenue. The deferral only impacts the timing of revenue recognition and will not impact cash flows from operations. The Company made a similar revenue deferral for the Windows Vista Technology Guarantee program during the 2007 fiscal year.
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