NPD Group: Initial Office 2010 sales are "disappointing"

The NPD Group has characterized initial sales of Microsoft Office 2010 as “disappointing.”

Indeed, senior NPD analyst Stephen Baker attributed the phenomenon to Microsoft’s “success” with previous iterations of its popular Office suite.

“Selling such a heavily used product into a base that has already been upgrading at a very high rate is an enormous challenge. While Office 2010 has many compelling new features, it is always an uphill battle to sell a high installed base product based on new features alone,” Baker explained in an NPD Group blog post.

“[Still], the key card product, designed to facilitate upgrading for PC buyers, has gotten off to a solid start accounting for about one-third of the unit volume. This is important because we do believe that the success of 2007 and 2003 at retail will make it very difficult for the boxed version of 2010 to generate much incremental retail sales volume above the trend line of the past 18 months or so.”

Interestingly, Baker emphasized that “free productivity” apps such as Google Docs were having a negligible impact on the adoption of Office 2010.

“While products like Google Docs are certainly playing a part in the overall productivity software ecosystem, it is a virtual certainty that the slower than expected initial sales of Office 2010 have nothing to do with free alternatives, be they Google Docs or Office 2010’s own online version.”

Although Baker claimed such products had “very little awareness” amongst mainstream consumers, he acknowledged that an eventual slowdown in retail sales was “certainly likely.”

“Mainstream consumers have not [yet] embraced the concept of the cloud, nor are they likely in the short to mid-term, making most of the questions around free software moot. 

“[So], the real short-term question is how Microsoft is able to match promotional fervor, pricing, and sales to the long-term opportunity to sell incremental versions of Office into a saturated consumer marketplace.”