Release of New Windows Delayed
Microsoft Corp. on Thursday delayed the general release of its next Windows program until next year, saying it needed more time to address some quality concerns.
Windows will be released in two stages -- a shipment to businesses in November this year, and a release to consumers in 2007, said James Allchin, co-president of the division in charge of Windows. Redmond, Wash.-based Microsoft had planned to release the product by the holiday shopping season.
“We set out here to do something of the highest quality that we’ve ever done,” Allchin said on a conference call with analysts to announce the release schedule. “We just basically will keep that as our top priority.”
The added delay to a product that is already two years late is a blow for Microsoft as well as the personal computer industry. Microsoft won’t get Windows in stores in time for the crucial holiday season which accounts for almost 30% of purchases.
“This is a major slip ... for Microsoft,” Rob Enderle, president of San Jose-based researcher Enderle Group, wrote in an e-mail after the announcement. “Missing the fourth quarter will have a significant impact on consumer sales.”
The announcement was made after the close of the stock market Tuesday. Shares of Microsoft fell to $27.02 in extended trading after closing down 15 cents to $27.74 during the regular session. The stock had gained 6.1% this year, in part because of optimism about sales of the new Windows, after falling in the last two years.
Windows for PCs is the software maker’s biggest business, at 31% of sales. Growth has slowed because Microsoft hasn’t had a new version of Windows for PCs since 2001. Sales in the Windows unit rose 6% in the year ended June 30, down from 11% growth in the prior year.
A January launch will not only hurt fourth-quarter PC sales but may make Microsoft vulnerable to delays because of holiday vacations, Enderle said.
Microsoft is trying to “crank up” the security level of the program, called Windows Vista, which needs a few extra weeks, Allchin said. “We’re trying to do the responsible thing here.”
