Microsoft Battle May Alter Industry
NEW YORK (AP) -- If the government ultimately gets its way with Microsoft Corp., the result could profoundly alter how people use personal computers, letting them buy new machines customized with features from Microsoft's competitors -- but possibly at higher cost.
But the big emphasis is on the ''if,'' industry experts said Friday.
Any future changes hinge on last-minute settlement negotiations between Microsoft and government lawyers, and whether the ongoing talks head off threatened antitrust lawsuits against Microsoft next week. Even if legal action ultimately is successful, major computer changes are a long shot.
Under their most ambitious scenario, Justice Department lawyers now in talks with Microsoft want to make it easier for computer customers to order new machines installed with, say, Netscape's Internet browser or WordPerfect's word-processing program in lieu of comparable Microsoft features.
That could be one result if the government succeeds in ending Microsoft's allegedly restrictive contracts requiring PC makers to install all of the many features Microsoft packages together as Windows, the operating program that runs 90 percent of the world's computers. Microsoft insists that this would fragment the Windows program, making it tough for software writers to develop programs that work on all Windows machines.
In addition, executives at Dell, Compaq and other computer firms might have more freedom to install software from companies such as Symantec, which makes the popular Norton Utilities that enable PCs to run more smoothly, compress files and protect computers from viruses.
Another possibility is packing free CDs of Netscape's Navigator with every computer. Computer makers might offer the software with machines as a way to gain a distinctive selling edge over rival's products.
Microsoft says this practice could eventually drive up the cost of computing by requiring PC users to pay for new features that would have been included for free in Windows machines.
But even with drastic Microsoft concessions or a successful government lawsuit pursuing this angle, industry watchers doubted many PC makers would take advantage of fewer contractual curbs because of the software maker's far-reaching influence.
''If they tell (computer) manufacturers they're free to load Netscape, I don't think they will because people are terrified of Microsoft,'' said former federal judge Robert Bork, a Netscape lobbyist and antitrust expert.
A more likely result of any Microsoft agreement or government antitrust lawsuit would be more subtle.
For example, Microsoft may be required to let PC makers put messages or company slogans in the boot-up screen that appears when people start their computers. Critics want Microsoft to relax limits on how computer makers can modify the opening Windows screen, which is a potentially valuable billboard for companies.
Another possible change is in the ''Channel Bar'' that appears on the desktop screen of Windows 98 and includes icons of places users can easily click to on the Internet.
The government says the feature enables Microsoft to easily steer PC users toward its own Internet services or those of preferred partners. As a remedy, Microsoft could be forced to give more access to other Internet companies.
A government goal is to try to help Microsoft rivals such as Netscape, which pioneered the browser market but has seen its share dramatically shrink, survive Microsoft's strategy of continually adding new features.
''The immediate goal is to prevent Microsoft from snuffing out existing competitors,'' said Warren Grimes, a former Federal Trade Commission lawyer who is a professor of antitrust law at Southwestern University School of Law in Los Angeles.
''Over the longer term, the goal is to open up the market so that others could have access to it.''
So far, the only concession Microsoft has agreed to is delaying by three days, until Monday, delivery to PC makers of its new Windows 98 software, which is scheduled to be sold to the public starting June 25.
But because the software update contains few important new features, only some computer enthusiasts were chomping at the bit for it.
More immediately, only a handful of high-tech companies are expected to suffer more than small disruptions from any prolonged delay resulting from a government lawsuit.
Even assuming Windows 98 is on time, sales during the first 18 months were expected to be 15 percent below those of Windows 95 during the comparable period three years ago, says International Data Corp., a Framingham, Mass.-based research firm. But by 2000, annual sales of Windows 98 are expected to exceed the predecessor system as more people buy new machines.
People needing computers right away say they'll just buy Windows 95 machines and then upgrade to Windows 98, whenever the CDs are available.
''I would classify this as an inconvenience, not a tragedy,'' said Scott Winkler, an industry analyst with the Gartner Group research and consulting firm, based in Stamford, Conn.
Makers of personal computers were going out of their way to ensure customers don't put off purchase plans. IBM, Dell, and Gateway are offering buyers of computers running on Windows 95 free upgrades to Windows 98. Two other PC makers, Compaq and Packard-Bell-NEC, were giving coupons for more than two-thirds off the roughly $109 software price.
Makers of computer accessories such as game joysticks and scanners were among the few companies girding for a sales disappointment. The first buyers of Windows 98 were expected to be computer enthusiasts seeking the operating system's ability to easily hook up these accessories.
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