OS Software Revenue Up 35%

IT Management

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U.S. retail operating systems boxed software revenue increased 35 percent in 2009, but it was not enough to lift non-games software into positive territory, according to new research from The NPD Group.

Total retail non-games software revenue fell 7 percent in 2009 to $2.4 billion.  That is an improvement over the 10 percent decrease in 2008. Unit volume for 2009 dropped 6 percent and average selling price dipped 2 percent.

Operating systems was the only category to post both a revenue and unit increase over 2008.  With new operating system releases from both Microsoft and Apple in the back half of the year sales traffic, volume, and interest in boxed software were at very high levels.   Both OS releases posted record sales and growth figures for their initial launch periods and continued to perform strongly even after their initial entry into the market.


"2009 was a mixed bag for the packaged consumer software market," said Stephen Baker, vice president of industry analysis at NPD.  "There is always a burst of interest when new versions of operating system are released.

"But weak results in the more stable sales categories, like tax and system utilities, drove overall revenue down.  Shifting channel activities and a move to more online purchasing took a bite out of both of those segments in 2009.   The outlook for 2010 is for similar sales results as the lack of any OS launches will likely be offset by the release of Office 2010."

Business software was the only other category, besides operating systems, to post a unit gain. The category grew 6 percent, due in part to ASPs dropping 15 percent.  MS Office Home and Student delivered strong sales volumes during both the back-to-school and holiday periods as a result of aggressive price promotion. 

The average selling price fell from $118 in the prior year to $106 in 2009.  Apple's iWork 2009 also saw strong unit volume growth as average prices declined more than 15 percent on the single-user version. With these falling prices, however, category revenue took a hit posting a 10 percent decline.

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