October launch for Windows XP

The company claims Windows XP, which had originally been slated for launch in the middle of 2001, will be its most important new product since Windows 95.

Some analysts had expected the launch of the new software to be delayed until early next year.

But Microsoft has settled on 25 October, 2001 - too late for the back-to-school sales period but early enough, the company hopes, to cash in on the all-important pre-Christmas market.

Marketing push

Microsoft group vice-president Jim Allchin said: "We're going to blow out the holiday season. It would have been nice to make back to school, but quality did come first."

The software giant is planning a massive marketing campaign for Windows XP - double the size of the launch of Windows 95 in the first four months alone.

The software would be sold in a Home Edition for consumers and a Professional Edition for businesses, Microsoft said in a statement on its website.

Windows XP is based on the same programming technology that underpins Windows 2000, which is more stable and secure than the old DOS technology in existing consumer versions.

It features a cleaner, simpler desktop design and allows several users to keep files on one computer private from each other. It also allows an authorised person on one computer to access another computer over the internet to fix problems.

Little that is new?

Critics have argued that - other than some superficial design changes that make existing features easier to see - little is new about Windows XP.

These criticisms were dismissed by Mr Allchin, who claimed: "It's a very feature-rich product."

After seeing early versions of Windows XP, some analysts argued that the security changes would create so many obstacles that customers might turn to alternative operating systems such as Linux, which provided more freedom.

The launch is certainly being seen as a challenge for Microsoft. Windows XP is expected to be a crucial step in Microsoft's long-term strategy to transform itself from a straightforward seller of software to a provider of net-based subscription services.

At the moment, Microsoft gets its revenue from big upgrades of Windows and its associated applications. But by turning its software into a subscriber service, it can guarantee a more regular income.

Sales prospects

The Windows XP 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.

Rob Enderle, a research fellow with Giga Information Systems, said: "Christmas will help on the consumer side, but business may have the opposite effect.

"It's got to do a lot on the consumer side to make up on the business side."

Shares of Microsoft were down $1.29 to $70.77 in midday trading on the Nasdaq stock market.