Tech stocks hit by delay to new Windows

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Microsoft’s decision to delay the launch of the consumer version of its next Windows operating system sent a tremor through technology stocks on Wednesday as Wall Street anticipated a resulting slowdown in PC sales late this year.

The world’s biggest software company said late on Tuesday that consumer sales of the long-awaited Windows Vista would not begin until January 2007, missing the important holiday shopping season.

However, Jim Allchin, the Microsoft executive who has long had responsibility for the Windows business, said sales to business customers would go ahead in November this year.

Though representing only a small further slippage after delays that have already stretched 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 shipments, 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.

Microsoft’s shares fell by 2 per cent to $27.15 by close of trading in New York. Dell ended unchanged at $30.41 after an early-day slip and Hewlett-Packard, which relies more on consumer PC sales than its rival, was down 0.5 per cent to $33.36.

The delay also marks a further embarrassment for Microsoft after it had promised that it had finally put its Vista troubles behind it.

The software company announced last year that the product would be available in late 2006, but only after it had simplified the software by stripping out a part of the operating system that it had earlier billed as a key part of the product.

Mr Allchin said that a delay of “a few weeks” in the rigorous testing programme needed to ensure the quality of the operating system meant that it would not 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.

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.

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