On January 30, 2007, Microsoft launched what was at the time its newest operatin

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On January 30, 2007, Microsoft launched what was at the time its newest operating system, Vista, to consumers. The project, years late and billions of dollars over budget, was one of the largest technology projects in history. Microsoft spent somewhere in the neighborhood of $6 billion developing the 50 million lines of code that constitute Vista, but some analysts projected it would make nearly twice that in operating profits in just the first six months following its release. Because each copy of Vista cost Microsoft only a few dollars to produce, Microsoft's profit margins were to be enormous The launch of Vista also translated into more revenue for retailers like CompUSA, Best Buy, and countless mail-order catalogs and Internet "e-tailers." However, as this article from the Financial Times pointed out, the profit margins of these retailers were much slimmer than Microsoft's. Read the following article from the Financial Times (January 28, 2007), and then answer the questions that follow. Technology Sector at Threshold of New World Order by Kevin Allison and Chris Nuttall For hundreds of tech companies around the world, tomorrow's Windows Vista launch will mark the end of five years of anxious preparations. "We've devoted 150,000 man-hours to working with Microsoft on the Vista roll-out and testing," says Shane Robison, head of strategy at Hewlett-Packard, the world's biggest personal computer maker. Source: SXC.hu, For many, however, the real work is only just beginning. Some analysts expect Vista's launch to result in a release of pent-up demand for new systems, with market research company iSuppli forecasting an increase in PC sales of 10 percent over last year, roughly in line with last year's growth rate. According to forecasts by market research company Gartner, 58 percent of new PC

Explanation / Answer

"Consumers had a difficult time using the new operating situation",

This will decrease the profit of the companies as it will require a hardware upgrade and new PC makers will have to provide that eating into their profit.

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