Computer software sales declined in 2006 compared to the previous year, due in part to consumers waiting for the release of Windows Vista and diminished purchases of tax software, according to a report.

Market research firm NDP Group said lat Thursday that U.S retail sales of personal computer software slowed 2 percent to $2.9 billion for 2006, down from the $3 billion generated in 2005.

The most significant losses were in operating system and finance software, which experienced respective dollar declines of 30 percent and 8 percent over the year.

The steep decline in retail operating system sales in 2006 was due primarily to the fact that most consumers that needed to upgrade older desktops and laptops to Microsoft Windows XP have already done so, said Chris Swenson, director of software industry analysis at The NPD Group. However, with the retail launch of Windows Vista set for the end of January, we expect the new OS to significantly drive dollar growth in the retail channel in 2007.

Increases were seen in business and system utilities software, which posted sales increases of 10 percent and 3 percent over 2005, the firm said.

Retail sales of tax software were down for several reasons, including the elimination of certain mail-in rebates, and the cannibalization of tax software sales by the online tax preparation services offered by various vendors, said Swenson.

Microsoft Office 2003 was the top ranking software in terms of dollar sales, followed by TurboTax 2005 and Norton Internet Security 2006.

The figures exclude video-games.

Retail sales Software Microsoft