For Immediate Release

Friday, September 29, 1995

New York, NY Alexander & Associates announced today that an estimated 2.6 million units of Windows '95 have been acquired by consumers -- either in the form of a direct purchase, a free upgrade to a prior Windows 3.1 purchase, or installed in a recently bought machine -- in the first 30 days of this product's availability.

Robert Alexander, President of Alexander & Associates, said: "these numbers are a tremendous achievement for Microsoft and attest to the effectiveness of the pre-launch and launch promotional effort. This clearly has to be considered one of the great consumer product launch success stories."

Alexander's estimates are based on a nationally representative survey of 1008 U.S. households conducted between September 22 and September 26. The analysis of purchases of Windows 95 was part of the firm's on-going tracking and analysis of the consumer, in-home based personal computer market.

According to Alexander, the data shows that about half of the total initial purchasers were acquired by young (18 to 34 year old), relatively well off men with average household incomes over $85 thousand per year. About 85 percent of the initial purchasers were white. "To some extent," he said, "this is the kind of audience that would respond to a trendy, must-have, new product pitch. While this is a great market with tremendous buying power, it isn't really a mass market."

Overall awareness of Windows 95 is very high, with 66 percent of PC households aware of the product on an unaided basis and another 30 percent aware of the product when the product name is used. These levels of aided awarenss in the target buying audience are outstanding. Product awareness was consistent across age, income and geography, the only important exceptions being households with incomes in the $15 to $25 thousand range and the South geographically. The very high and consistent levels of awareness across a broad range of consumer groups underscores the effectiveness of the pre-launch and launch campaigns.

The initial surge of purchases came from that group that could be expected to be first in this product's adoption, given the way it was launched, namely younger, affluent buyers. Purchase intent information from the survey suggests that the next round of sales will be made to different groups of buyers, some of them farther down the income ladder and to other race and ethnic groups in the population. This pool of prospective buyers, who describe themselves as "very likely" to purchase the product before the end of the year, numbers in total about 1.4 million households.

A larger pool of prospective purchasers totalling about 4.4 million households describes themselves as "somewhat likely" to buy Windows 95 before the end of '95. This group clearly has the financial resources, with overall average household incomes higher even than that of the initial buyers, but they are distinctly older, a broader cross section of the population, and evidently more cautious in making the purchase decision. There is a slight bias in the "intent to buy" group toward households in the northeast and toward families with children.

"We believe that the initial excitement of product release has run its course," Alexander said, "and based on our analysis of the data, we would expect sales to consumers over the next three months to about equal the first month's sales." Units installed in consumer homes might reach a total of 5 million by the end of 1995, or about 20 percent of DOS platform personal computers.

Alexander & Associates, Inc. is a business consulting firm based in New York City that concentrates on the new consumer media ranging from home video to interactive television. The firm's practice focuses on the impact of new technologies on the development and exploitation of new media. Its clients include major entertainment studios, computer and videogame companies, and telecommunications firms.

This study is part of a weekly tracking program launched by the firm in April of this year to measure the increasing incidence of personal computers in consumers' homes. The results of over 1,000 completed interviews with a stratified random sample of U.S. households have been weighted to reflect the U.S. population generally. Sampling error associated with these results implies a range of plus or minus 800 thousand units around the estimate. Consideration of other data related to this estimate, including non-survey information, suggests that the most likely range for unit purchases is in the 2.2 to 2.6 million unit range.

Additional information can be obtained by contacting the company directly or in the "White Papers" section of the website maintained by the company at www.alexassoc.com.

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