Windows XP to Debut in October

Microsoft Corp. said Wednesday that it will release Windows XP, the new version of its personal computer operating system, in late October, in time for the holiday season but too late for the back-to-school crowd.

Microsoft will spend hundreds of millions of dollars to promote the product, to be released Oct. 25. The campaign will cost twice as much as the amount spent to advertise Windows 95 in the first four months after it was launched in August 1995. Group Vice President Jim Allchin declined to give specifics.

Windows XP, hailed by Chairman Bill Gates as Microsoft’s “most important release since Windows 95,” will be available on new personal computers and in full and upgrade versions at retailers.

“We’re going to blow out the holiday season,” Allchin said in a conference call to analysts Wednesday.

“It would have been nice to make back to school, but quality did come first,” he said.

The company has not said what it will charge for the product, but previous versions of Windows have retailed for about $90.

Microsoft will release two XP editions: a consumer-oriented Windows XP Home Edition and a business-oriented Windows XP Professional Edition.

Microsoft is touting Windows XP as the most user-friendly version of the operating system. The system, built on technology found in the more robust Windows 2000 operating system for corporate users, features a cleaner, simpler desktop design and allows several users to keep files private on one computer.

It also allows an authorized person on one computer to access another computer via the Internet to fix problems.

Microsoft’s critics have said that little else is new about Windows XP besides some design changes that make existing features easier to find and use.

Allchin dismissed such criticism. “It’s a very, very feature-rich product.”

Windows XP, which cost more than $1 billion to develop, also comes at an uncertain economic time. Microsoft itself has acknowledged that the phenomenal growth in PC sales has slowed considerably. The company now is predicting PC sales will slow to 7% or 8% for Microsoft’s fiscal year ending in June, and won’t get better in the coming fiscal year.

Allchin said he expects Windows XP to boost PC sales.

“The holiday season is going to be great for the PC industry,” he said.

The release date will miss the start of the school year, but the bigger problem may be that it comes too late for corporations--which make up 75% of the market--to upgrade for the year, said Rob Enderle, a research fellow with Giga Information Systems who follows Microsoft.

“Christmas will help on the consumer side, but business may have the opposite effect,” Enderle said. “It’s got to do a lot on the consumer side to make up on the business side.”

Microsoft shares fell $1.66 to close at $70.40 on Nasdaq.