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March 21, 2006 11:01 pm

Microsoft next-generation Windows delayed again

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Microsoft on Tuesday announced a new partial delay to the launch of the next version of its Windows operating system.

The move deals a potentially damaging blow to the global PC industry in the important Christmas sales season later this year.

Consumer sales of the long-awaited Windows Vista will not now begin until January 2007, though sales to business customers would go ahead as expected in November this year, said Jim Allchin, the Microsoft executive who has long had responsibility for the Windows business.

Though it represents only a small extra slippage after delays already running into years, the news could spell trouble for PC makers, as well as software companies and makers of printers and other devices whose sales are closely linked to new PC sales, according to analysts.

“If you miss the Christmas season, you pretty much flush the whole consumer market down the toilet,” said Roger Kay, an analyst at Endpoint Technologies. The delay also marks a further embarrassment for Microsoft after the US software giant had promised it had finally put its Vista troubles behind it.

Microsoft announced last year that the product would ship in late 2006, but only after being simplified by stripping out part a part of the operating system that thew company had earlier billed as a key part of the product.

Mr Allchin said a delay of “a few weeks” in the rigorous tests needed to ensure the quality of the new operating system meant it would not now be able to release the software to all PC makers early enough for them to be able to ship machines in time for the holiday shopping season.

While some manufacturers and retailers had said that they would still be able to make PCs loaded with Vista available in time, others had asked for a delay in the official launch date of the new software, the Microsoft executive said.

Most PC companies have their machines built by contract manufacturers in Asia, leaving a delay before they can be shipped to their final market in other parts of the world.

Although business customers will still receive the new Windows software on time, most are likely to take many months testing the system before introducing it into their companies. That makes consumers the most important early customers for a new PC operating system, according to Rick Sherlund, software analyst at Goldman Sachs.

PC sales have already started to slow as customers wait for the new Windows operating system, said Rob Helm, an analyst at Directions on Microsoft.

Mr Helm said the delay should not have a material impact on the industry: “except to the extent that it artificially depresses consumer PC sales” during the holiday season,

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