Thurs Oct 25, Microsoft launches XP with worldwide hype
By Siobhan Kennedy
NEW YORK, Oct 25 (Reuters) - Software giant Microsoft Corp. (NasdaqNM:MSFT - news) launched the latest version of its flagship Windows software on Thursday, reeling in the chief executives of top computer companies to kick off a $250 million marketing campaign in the heart of New York.
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To a backdrop of a gospel choir singing ``America the Beautiful,'' Bill Gates, Microsoft's co-founder and Chief Software Architect took center stage alongside New York's Mayor Rudolph Giuliani. The CEOs of Intel Corp. (NasdaqNM:INTC - news), Hewlett-Packard Co. (NYSE:HWP - news), Dell Computer Corp. (NasdaqNM:DELL - news), and Compaq Computer Corp. (NYSE:CPQ - news) looked on from the wings.
``There was only one place to launch Windows XP,'' Gates told the 2,000-strong audience in a hotel on Times Square. ``Right here in the heart of New York.''
Microsoft's top dogs were all out in force for the launch of the software, which the company is touting as a key catalyst that could help lift sluggish PC sales. Meanwhile retailers are banking that the software will lure timid consumers back into stores just in time for the holiday season.
But analysts warned the software would provide little solace.
``In our view, Windows XP is one factor, but it won't be enough at this point to offset the macroeconomic factors pulling the other direction,'' Bear Stearns analyst Andrew Neff said.
The successor to the Windows Me consumer operating system and the Windows 2000 business system, Windows XP (for eXPerience) combines the best of both, promising features like digital media, games, and photography alongside rock-solid stability, according to the company.
Windows XP has been pre-installed on new personal computers for weeks, but became available in shops on Thursday for $199, or $99 for an upgrade.
True to form, Microsoft threw launch parties around the globe, schmoozing thousands of customers and business partners.
Microsoft Chief Executive Steve Ballmer held the fort in London, as Gates, clad in a Windows XP baseball jacket, described the launch of XP as the version of Windows that will ``take the PC industry to new heights.''
``We've poured literally billions of dollars of development into this new product,'' Gates told the audience, noting the host of new security, privacy and messaging features that come integrated as part of Windows XP.
Although many of these features have been available on PCs for some time, Gates said Windows XP was the first time they'd all been brought together in one easy-to-use system.
``This gives them the ability to do what they do now in a much simpler way,'' Gates said.
Windows XP does away with the decades-old DOS fundamentals on which its predecessors were built, sharing instead the basic source code of Windows 2000, which analysts said makes the operating system much more stable and less likely to crash.
``Today, this is the end of the MS-DOS era ... the end of too many PC crashes.'' Gates said of the 13-year effort to replace Microsoft's original operating system with a DOS-free Windows.
``But telling customers that this product really won't crash seems like a tepid sell,'' Neff said, who added that a combination of Windows XP, Intel's new Pentium 4 processor and an economic upturn in 2002 could help drive another wave of PC demand.
WILL XP BOOST COMPUTER MARKET?
Microsoft has long touted XP as the product that could help boost flagging PC sales, which fell more than 10 percent in the third quarter, according to research firm Gartner Dataquest.
But U.S recession fears and dwindling consumer confidence after the Sept. 11 air attacks on New York and Washington, D.C. have dimmed hopes for an all-out revival of the sector.
``Perhaps Windows XP may arrest some of the sales decline, but we believe PCs sales will still be on the decline year-over-year,'' said Shelly Hale, an analyst at Banc of America Securities.
Microsoft did its best to boost optimism, bringing in Regis Philbin, the host of the U.S quiz show, ``Who Wants To Be a Millionaire?'' and even hiring pop star Sting to perform a free afternoon concert in nearby Bryant Park.
``It is a galvanizing force for the industry,'' Jim Allchin, president of Microsoft's platforms group that oversees Windows, and the man credited by Gates as being the driving force behind Windows XP, told Reuters.
Consumer and small business PC-maker Gateway said it has shipped 100,000 units loaded with XP. Meanwhile, Hewlett-Packard says the initial XP sales have been positive and that it expects that XP's ease of use will drive sales of other products like printers and scanners.
``It will have an impact, but given the terrorists, given the world economy, who knows when that will be?'' Allchin said, adding, ``It's only a product.''
GOOD TIMES, BAD TIMES
To thunderous applause, Giuliani said the event ``couldn't have come at a better time,'' for the city, just six weeks after hijacked planes devastated the twin towers of the World Trade Center, crippling New York's financial community and bringing much of the city's business to a standstill.
But as some noted, the timing for PC users might not be so ideal, especially for those who recently bought new machines. The latest Windows version requires more computer memory and a faster microprocessor, forcing businesses and consumers to upgrade their PC or, rather, buy a new one, analysts said.
``It uses up a lot more resources ... you have upgrade memory, you have to make sure you have enough disk space,'' said Bobby Orbach, an executive with venture capital firm TechFarm, and a veteran of the computer retail industry in New York. |
