Surprise, everyone. Vista sales suck. It’s now official, and Microsoft can’t sham people about it any more:

Standalone unit sales of Vista at U.S. retail stores were down 59.7 percent compared with Windows XP, during each product’s first six months on store shelves, according to NPD Group.

Well, I’ll be. Who could have predicted that?

In terms of revenue, sales are also down, but the drop has been less steep, at 41.5 percent.

This is probably due to the new tiered version plan–the “Vista Home Basic” version which they use to tout how “cheap” Vista is, is so cut-down that it is effectively a piece of crud. It has few of the features that Vista is actually sold on. When XP was sold, there was only the “Home” version, not versions of the Home version. People have to pay more now for the basic package–ergo the relatively higher revenues on fewer sales.

Microsoft also agreed that an analysis of boxed copy sales is not representative of Vista’s momentum, noting the trend of people getting a new operating system with a new PC has further accelerated with Vista.

Like Bush and Iraq, Microsoft is trying to apply lipstick to a pig. Read the above statement again. They are effectively saying that more people are getting Vista only when they buy a new computer. However, there is one possibility in that trend that might indicate higher Vista sales: Vista is such a resource hog that people realize that they must buy a new PC in order to use it. If that’s happening a lot, then Vista might be doing relatively well. Otherwise, Vista sales are tanking.

PC sales doubled between 2001 and 2006, before Vista was released, so Microsoft can’t take credit for that. If there was a sudden spike in PC sales after Vista, Microsoft could claim credit for it, but I’m pretty sure that such an increase, if it happened, was not so great. The last fig leaf that Microsoft can hide behind is that a lot of people want Vista, and they just happen to be buying new PCs anyway. But it’s getting harder for them to cover up the fact that Vista just plain sucks.

Last semester, I had one student in my Computer class who has Windows Vista. I asked him if he liked it, and his response, purely physical, was unmistakable–the entire class giggled and laughed, as did the poor, sheepish Vista victim. This semester, I have more students who have Vista, and the reaction is still the same. I have not heard one positive thing from any of them yet, though I have asked. Some report frequent crashes, others complain of hardware and software incompatibilities. Others could not even find much-ballyhooed new features, like the Sidebar with Gadgets–Microsoft hid that one within several layers of sub-menus in the Start Menu. One of my students let out a startled yelp when I activated it in a demo.

When I visit Bic or Yodobashi, the Vista section is deserted, while the iPod sections are lively. Yes, I know, it’s hardly scientific. But the overall signs are pretty hard to miss.

Microsoft’s great hope for revitalization lies in Vista SP1, which in theory will fix most of those bugs everyone is complaining about. My students’ ears pricked up when I mentioned it–and they were just as disappointed when I passed on the information that it was due out “sometime” next year. Most corporations are taking a similar wait-and-see attitude with Vista SP1.

News on the retail front is brighter for Office, which was released to stores the same day as Vista.

Retail sales of Office products from January through June were roughly double those of Office 2003 during its first six months on the market and up 59.6 percent from Office sales for the first six months of last year. (Sales of Office 2003 at retail continued to grow over the life of the product.)

Now this I can understand. I have been remaking my Computer class web site because my school switched from Office 2000 to Office 2007. The intermediate upgrade to 2003 was OK, but not all that impressive. 2007, however, is a huge step forward. The live format previews, much-improved graphics, and the easy-access Ribbon are all significant steps forward, in my opinion; I think Microsoft did a great job with this one, and I can easily see sales of it performing well.

But here’s an interesting twist:

While much of the sales were for the new Office 2007, Swenson said just over 20 percent of all boxed copies of Office were Office for Mac. Swenson credited the large number of people switching to Macs as part of the reason for the spike in Mac Office sales.

That’s credit for how good Office 2004 for the Mac is. Office 2008 for the Mac is due out in January, but if 2004 is selling that well, it’s good news for Microsoft’s Office unit–not so well for their Vista unit, though. The news is mixed for Apple–good news on market share, but it also shows that people aren’t fully aware of the iWork suite.

One last ray of hope for Vista:

Just because boxed Vista sales are down doesn’t mean they won’t pick up, he added. He noted that XP sales peaked a few years after its 2001 launch.

“My hypothesis as to why is that there were a lot of people that bought PCs running 2000 or ME before the XP launch, and thus when they decided to upgrade they opted for the XP upgrade awhile after their initial purchase,” Swenson said. “There is a possibility that we might see a similar trend with Vista.”

A weak hope, at best–people who bought XP within the last year who will hang on to it just because they don’t feel like upgrading so soon. Can we shoot that one down?

But given the fact that only relatively new PCs can be upgraded to Vista, and with standalone sales not showing signs of improving, Swenson said, “it’s looking less and less likely that this will happen.”

Good point. The hope is that Vista would be like XP–but the main point of this whole news article is that Vista is sucking relative to XP. Add the fact that Vista often requires a major hardware upgrade, and that hope dims further. It’s not that people are waiting to upgrade to Vista, it’s that they can’t upgrade to Vista. Big difference.

Here’s where one of the advantages of PCs over Macs boomerangs on Microsoft. While Macs are priced competitively to PCs when you buy Macs and PCs with similar feature sets, you can buy super-cheap, stripped-down PCs, while you can’t get Macs like that. This is what perpetuates the PCs-are-cheaper-than-Macs myth. The problem: people who bought PCs even a year ago, not too long before the Vista release, still can’t upgrade to Vista because a Celeron running with 256 MB of RAM won’t cut it with Vista.

Without a “killer app” motivation to upgrade, a lot of people are going to be content to stay with XP. And if they decide to buy a new computer, more and more often the Mac will gain attention as a possible replacement.