For Kingston Technology Co., the best thing about Microsoft Corp.’s new Vista operating system is its insatiable appetite for memory.
The Fountain Valley-based memory products maker could be among the beneficiaries of technology spending spurred by Vista’s release late last month.
“With every new operating system that comes out, whether it’s Microsoft or Apple, they almost always require significantly more memory,” said Mike Sager, a Kingston vice president.
Microsoft recommends 1 gigabyte of memory on computers running Vista. Dell Inc., Hewlett-Packard Co. and other computers maker suggest doubling that.
“They’re all recommending double the capacity, which we’re not used to seeing,” Sager said.
Kingston, which has about 850 local workers, is bulking up itself. Most of the hires are in sales and marketing, pitching the company’s memory boards and flash cards.
This week, privately held Kingston is set to announce sales for 2006, which are expected to be up from 2005’s $3 billion.
Vista could spur sales at technology companies across the county. Others that could benefit include Lake Forest disk drive maker Western Digital Corp., STEC Inc., the Santa Ana-based memory products maker formerly known as SimpleTech, and Santa Ana-based technology distributor Ingram Micro Inc.
None would ballpark what kind of Vista-related sales gain they might see. Some caution the effect could be muted. Most would agree it won’t be the big bang of Windows 95 more than a decade ago.
Irvine memory products maker Netlist Inc. is in a different boat. It provides memory for servers, which won’t run Vista.
“From the market information we see, it looks like Vista will have an impact,” Chief Executive Chuck Hong said. “But Netlist targets the server and high-performance computing markets. The impact of Vista on that large segment of the computing market is much less clear.”
Others say there’s potential for strong orders, hiring and new products.
Kingston has seen orders, though it likely will be late in the year before the company sees a big increase, Sager said.
Irvine computer maker Gateway Inc. has been shipping computers with Vista since last month.
“Everybody, including us and retailers as well, are trying to anticipate exactly what the demand is going to be for Vista,” Chief Financial Officer John Goldsberry said in a recent conference call. “Things look good, but it’s too early to be definitive.”
Vista comes at a critical time for Gateway. The company is working on a turnaround focused on consumers.
Meanwhile, market leader Dell is having troubles of its own, which prompted Michael Dell to recently return as chief executive.
Dell is a key customer for several local computer products makers, including Wes-tern Digital.
“The effect for Dell in their recovery effort is really good news, and the offshoot of that is Western Digital is their key supplier,” said John Donovan, vice president of Palo Alto-based Trend Focus, which tracks drives.
Roughly 10% of Western Digital’s $4 billion in yearly sales are to Dell, the company’s largest customer.
For now, Western Digital isn’t seeing any extraordinary demand, spokesman Steve Shattuck said.
“Although we would anticipate over time with Vista’s more sophisticated storage-hungry applications, we’d see higher capacity drives being in demand,” he said.
That could bode well for Western Digital drives in stores. In the December quarter, the company saw a 6% shift in sales from computer makers to sales through stores.
“That was 17% of our overall revenue,” Shattuck said. “Maybe five quarters ago it was only 5%. That’s an example of how rich media is having an impact on the storage business.”
Vista, the first Microsoft operating system since Windows XP more than five years ago, hasn’t had the gigantic marketing push of earlier software. But it is still the biggest technology buzz since the debut of Apple Inc.’s iPod in late 2001, tech watchers say.
“Anytime a new product as significant as this comes on board, it necessitates new expertise,” said Uri Blackman, chief executive of Los Angeles-based Gideon Informatics Inc. and a director of the Technology Council of Southern California, which includes several local member companies. “It enables new innovations, it could affect hiring and there’s a lot of innovation coming out of the university.”
Initial sales of Vista have been mixed, and almost all have been to consumers. As with most tech spending, it could take corporations getting on board to really drive the market.
Companies could seek to standardize on Vista if executives and other workers are using it at home, according to Trend Focus’ Donovan.
“I think that’s going to make the corporate side move quicker,” he said. “It’s not the same as it was a long time ago. People are actively doing work all over the place.”
