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PC World links poor profits to Vista sales

David Meyer ZDNet.co.uk

Published: 18 Oct 2007 15:45 BST

Poor sales of Windows Vista-related products have hit the profits of PC World, according to its parent company DSG International.

In an interim trading statement issued on Thursday, DSG International said that a 0.6 percent drop in its group profit margin over the 24 weeks to 13 October was "largely driven by slower Vista-related hardware sales and a changing sales mix in computing".

"PC World delivered good sales performance against a tough prior-year comparative in the back-to-school period," said the group's chairman, Sir John Collins. "The reduction in laptop stocks that arose out of disappointing sales of Vista-related products and a changing sales mix have reduced gross margins by around two percent in the computing division, impacting group profits by around £20m in the first half. Stocks are now at normal levels and we expect to recover some of the lost margin through the second half."

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Windows Vista was released to business customers in November 2006 and consumers in January this year.

A recent US report comparing early sales figures of Vista and its predecessor, XP, has suggested that Vista is selling poorly there.

Research released earlier this month also claimed that business sales of PCs with pre-installed Vista were slowing.

However, Dell has come out in support of the operating system with a prediction that most of its business customers will have migrated to Vista by 2009.