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Last Updated: Wednesday, 22 March 2006, 11:39 GMT
Q&A: Microsoft's Vista launch delay
Microsoft Vista logo
The delay from 2006 to 2007 will hit production of new computers

Software giant Microsoft has put back the launch of its next operating system until next year, missing the financially rewarding Christmas period.

It had originally aimed to launch Vista - the first major update since Windows XP was introduced five years ago - in the second half of 2006.

Now, a version will be available for corporate customers from November 2006, while the public will have to wait until January 2007 for the new operating system.

What does this mean for the computer industry?

The computer industry relies on innovation to drive replacement demand.

The world market is largely driven by demand in Europe and the US, and that demand is dependent on innovation to make people buy new models of computers.

Most computer sales also take place in the crucial fourth quarter period which covers Christmas.

"The industry had been expecting Vista to arrive in time for the important holiday season at the end of the year," says Brian Gammage, research vice-president at technology analysts Gartner.

"This means they don't have the new system in place in new computers for consumers. The impact for the industry will be a disappointing one."

However, in public at least, large computer makers like Dell and Gateway are putting a brave face on things.

But at the end of the day, there is nothing the computer industry can do about it.

"Hardware without software might as well not be there," says Mr Gammage. "They need an operating system, and everyone had been waiting for Vista."

It had been essential for computer makers that they had the new operations in place in their portfolios by November at the latest.

Will anyone else be affected?

As well as the companies that make PCs, others that might be hit include electrical stores which sell computers.

For them, too, the Christmas period is a crucial trading time.

Others that may be hit include "fellow travellers" in the computing industry.

"Intel says Vista can't arrive soon enough as far as it is concerned," says Mr Gammage.

And of course, consumers waiting to get their hands on new computers containing the Vista software will be disappointed.

How will consumers be affected?

Obviously, it means they will have to wait a few months longer than they had expected to buy new computers containing the fresh Vista system.

However, with new computers coming after Christmas rather than before it, they may actually find themselves paying a cheaper price for computers than they would have originally.

"People are willing to pay higher prices for computers before Christmas than after it," says Mr Gammage.

People will now have to wait until after Christmas to get their hands on Microsoft Vista.

"This delay will actually have the least effect on consumers, compared to other groups," says Mr Gammage.

What does it mean for businesses that use Windows?

Business tends not to deploy new software without first deciding change is absolutely essential and then after long-running testing.

Unlike consumers, firms do not buy software because it is "new" but because they feel it is up-to-date for their business.

"We had not expected most businesses to switch immediately to Vista, but to wait until early 2008," says Mr Gammage.

"That will remain the case, with perhaps only minor slippage in take-up at the most. Companies allow for long lead times in taking up new systems."

What has this done to the Microsoft name and reputation?

"Just a few months ago, Microsoft had been saying it would be releasing the new system to industry in August," says Mr Gammage.

He said Microsoft's "road map reliability" had already been at a low ebb and the latest events will not have helped to build confidence in its timetables.

There have been talks recently among senior executives at the company about how to produce a more reliable position on releases.

"I don't think this decision damages it much more - confidence in its road maps was already low," says Mr Gammage.

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