PC makers may ship Windows XP early

From...

By Matt Berger

(IDG) -- Some vendors plan to ship PCs and laptops running Microsoft Windows XP a month ahead of the expected October release date, two major manufacturers confirm.

Compaq confirms it will sell PCs with Windows XP installed through its online distribution channel about a month before those systems hit retail shelves in October. Another PC vendor, which asked to remain unnamed, also confirms Microsoft gave the company permission to ship Windows XP on PCs before the operating system's scheduled October 25 release date.

It's yet another sign of Microsoft's urgency to get the hotly debated operating system on the market. It seems increasingly unlikely Microsoft will reach the official release date unscathed, amid mounting legal and industry criticism.

For example, a handful of privacy groups in July asked the FTC to delay Windows XP's release, saying Microsoft is treading again on antitrust violations by its application bundling, as well as infringing on privacy with some of the operating system's features.

The U.S. Department of Justice and state attorneys general who are plaintiffs in the government's ongoing antitrust case against Microsoft have not filed for an injunction. However, Microsoft appealed on Tuesday to the U.S. Supreme Court. Some legal experts say the move could help prevent court-ordered interference with the Windows XP launch by drawing out the legal process.

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Vendors Eager

Meanwhile, the PC vendors are eager to ship the operating system as soon as they can, hoping it will help pull them out of a recent slump in PC sales. IDC researchers estimate PC sales in the United States in 2001 will fall more than 17 percent compared with last year. Analysts expect global sales to grow only about 5.8 percent this year.

"We've known for a while" that Compaq would sell Windows XP computers before October, says David Albritton, a Compaq spokesperson. Selling computers with a new operating system before the official launch date is common practice, he says.

A spokesperson for another major computer manufacturer, who asked not to be identified, also confirms Microsoft is authorizing early shipments of PCs with XP installed. He characterizes the move as a decision made swiftly, probably motivated by Microsoft's determination to release the operating system before critics could win a court injunction to delay the release.

Microsoft, however, strongly denies any plans for an early release.

"Our schedule has not changed, and we remain on track for an October release," says Jim Cullinan, a Microsoft spokesperson. "We are on track to release to manufacturers on schedule so that manufacturers and retailers will have PCs ready to sell on the release date."

Microsoft has not changed its scheduled release of the software to vendors, Cullinan says. Microsoft will not reveal the date, though analysts speculate that PC makers will get the operating system in late August. Cullinan does not confirm that estimate.

Marketing Blitz

Microsoft promises a major launch of the new operating system. Executives say the company will spend more than $200 million on Windows XP marketing in the first four months of its release. Microsoft is targeting as many as 320 million potential customers, says Jim Allchin, group vice president for Windows.

Likewise, many computer makers are readying their marketing arsenals for Windows XP's release. Gateway and Compaq both plan a big push upon release. In June, more than 15 PC vendors started selling "XP-ready" computers--systems installed with Windows Millennium Edition but configured with drivers and hardware specifications to support Windows XP.

As part of that program, Compaq has been selling its XP-ready machines with a $29.95 XP upgrade fee, says Albritton. Similarly, Gateway sells PCs with an offer to upgrade from Windows Me to Windows XP for only $15. However, a Gateway representative would not comment on when Gateway will actually ship PCs running Windows XP.

"Gateway's ship date has not been determined," the spokesperson says. "It all depends on Microsoft and when they'll let us ship."