Microsoft’s Windows XP Release Timed for October

Microsoft Corp. pegged Thursday, Oct. 25, 2001 as the date for the highly anticipated next release of the Windows operating system, Windows XP — the cornerstone of its .NET (or “Software as a Service”) business strategy.

The operating system will be available on new PCs and as a full or upgrade version at retail locations in two editions: Windows XP Home Edition and Windows XP Professional Edition for businesses. Windows XP Home edition is an upgrade from Windows 98 and Me, while the Work version is molded on Windows NT and 2000.

Microsoft will “blow out the holiday season,” Jim Allchin, group vice president of the Platforms Group at
Microsoft, said during a mid-morning conference call.

Reaction to the release date was mixed. International Data Corp. believes the latest version of the popular OS will be quickly accepted. “IDC expects that Windows XP Home Edition and Windows XP Professional will see more new license shipments by the end of 2002 than any other new Microsoft operating system has had in its first full year of availability. This will make it the fastest-adopted version of Windows to date,” said Al Gillen, an analyst with IDC.

But Goldman, Sachs & Co. said the October 25th XP general availability date was a bit later than
it would have hoped and warned that “Microsoft runs the risk of obsoleting PC inventory that has already been shipped into the channel.”

Indeed, Microsoft’s Allchin sidestepped the unquestionable frustration the company must have experienced when it missed the boat on racking up sales of Windows XP during the back-to-school buying period.

“It would have been nice to make back-to-school, but quality came first,” he told analysts and the media.

Shares of Microsoft were off 90 cents at $71.15 in very heavy trading on Wednesday.

Microsoft has admittedly waged a full scale, financially undisclosed marketing effort to acquaint consumers and businesses with its new OS. The company said Windows XP would be unparalleled and its biggest product launch ever. The Redmond, Wash. company said it was “doubling the investment of the Windows 95 launch in the first four months of product availability alone,” but would not release the cost of the campaign.

And the campaign couldn’t have come at a better time for the company. Microsoft’s constantly shifting XP release date — first slated during the summer months and then before the holidays — had computer manufacturers both confused and uneasy for much of the year as they looked for a new product rollout to help bump up PC sales at prime shopping times.

Businesses that have been conflicted about whether or not to wait to upgrade to Windows 2000 were advised to continue with 2000 and then to upgrade to XP with their next roll-out.

“I would propose that the next machine that businesses roll-out use XP. If somebody is on 95 or 98 they need to get off of it,” Allchin advised with his eye toward sales of XP.

Windows XP is expected to arrive in shops and homes with heightened security built-in to guard against would be hackers.

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