Xbox 360 retail inventory, at least by our own local retail shelf barometer, indicate things are definitely improving. Have been seeing both Xbox 360 premium and core (more core systems though) in the stores. Toys R Us, Walmart, Fred Meyer, Costco … just look around, they are getting out there.

For the third quarter itself, analysts polled by Thomson Financial expect Microsoft to post quarterly revenue of slightly more than $11 billion, an increase of 15 percent over the company’s revenue in the same quarter last year.

Will Q4 2006 be a loser for Microsoft compared to 2005? The speculation I’ve read so far has been mixed (mostly negative) since Vista and Office for the consumer is being pushed back to Q1 2007, but looking at the graph in the PI article linked above they still cleared nearly $10 billion in quarterly revenue in Q1 2006 which was up from both Q1 2005 and Q1 2004.

This data indicates that people are still buying computers (with Windows) even with the knowledge that Vista and Office are going to be a 2007 story, save for businesses. Still buying Microsoft products despite retail inventory shortages (Xbox 360). Still doing business with Microsoft.

Despite the negative PR swirling around the Vista and Office delays, the bottom line hasn’t been shaken. Yet. Q4 2006 will be interesting to watch.