Startup for a $200m XPerience

Users say XP looks cleaner and crisper

By CNN's Graham Jones

LONDON, England (CNN) -- Microsoft launches its new Windows XP operation system simultaneously in New York and London on Thursday in what is being described as the biggest and brashest ever computer launch.

Chairman Bill Gates -- who has described Windows XP as Microsoft's most important system so far -- will front the fanfare for the new system in New York.

Leading the razzmatazz at London's Royal Festival Hall will be CEO Steve Ballmer where representatives of XP's big-name partners including Intel, Dell, Virgin, Tesco and Egg, will also take the stage.

Meanwhile smaller launches are taking place this week at other European capitals including Paris, Berlin and Rome.

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Globally the marketing hype for XP (short if you hadn't guessed for the buzz-word "Experience") is to cost $200 million in its first four months and features Madonna's "Ray of Light" as its theme tune.

The computer giant promises celebrity surprises at its UK extravaganza. For the launch of Windows 2000 in New York, Star Trek's Patrick Stewart was beamed down though the one star definitely ruled out is the London-based material girl on the ad-track.

The PC industry is hoping XP will inject new life into a sector that has seen sales fall in the past two quarters and Microsoft is convinced new computers will walk out of the shops.

"We are very excited about Windows XP and the positive benefits it will provide customers and businesses," Simon Witts, Vice-President, Microsoft Europe, Middle East and Africa told CNN.

"Windows XP will lead to a reinvigoration of the PC and the work environment. Much can still be done to make PC users in companies more productive."

For their part, the PC makers -- recent company earnings down 12 percent across Europe and 16 percent in the UK -- have been pushing out "XP ready" computers to the shops.

The new software has already been looked over by some influential eyes.

Madonna's "Ray of Light" is the launch theme

During the summer's British election campaign, PM Tony Blair and wife Cherie visited the UK Microsoft HQ in Reading. Cherie was heard telling the PM she would give him a full run down when they got back to Downing Street.

Computer watchers say the new system is much more reliable (less prone to crashes), easier to use, with a better "Start menu", a snazzier look and brighter icons.

It is more secure with file encryption and restricted access.

The printer links are improved, there is instant messaging, voice technology and the multimedia applications are ranked by experts as impressive, especially for digital photography.

A feature called Compatability Mode fools older programs into thinking they are working with Windows 95, 98, ME or 2000 so they do not choke with XP.

It's also family-friendly. Each computer can be used by a number of different members of the household so dad's accounts don't have to be closed before the screen is set to the real business of Grand Turismo.

But the product has also brought controversy - including the long-standing criticism of Microsoft that the operating system promotes many of its own services including the MSN Internet service and its Media Player software - thus excluding rivals and curbing consumer choice.

As in the long-running anti-trust case in the U.S., EC regulators are still investigating Microsoft's linkage of Windows to its Microsoft browser and Media Player systems though Brussels said it would not move to stop the XP launch.

CNN.com's parent company, AOL Time Warner, has said that the company's plans for Windows XP are further evidence of anti-competitive practices.

There has also been criticism of the XP registration procedure which involves contacting Microsoft with a unique 44-digit number to "activate" the software.

Rupert Goodwins of ZDnet says: "People are very uneasy about this. This gives Microsoft control of something you've bought, for the first time.

"And when you do something to it that Microsoft don't like, then they can turn it off." Microsoft defends "activation" as an anti-piracy measure.

In the company's marketing-speak "Windows XP builds on people's dreams, taking the power and adaptability of the PC to a new level." (Bill Gates).

But will the new product build on Microsoft's own dreams?

Britain's Dixons -- which owns the retail chains Dixons, Currys, PC World - says XP would drive sales in the autumn with still only 35 per cent of UK households having PCs.

Industry insiders are sceptical and say that although bringing lots of fancy add-ons as standard, the technology is nothing revolutionary.

"Really there is not anything new in application terms," says Brian Gammage, principal PC industry analysts for the Gartner research group. "It is just an integrated version of what they've got already."

Gammage predicts "no significant effect whatsoever" on PC sales.

"There are enthusiasts who upgrade but these are a small part of the market, around 10 percent.

"People buy computers because they can do things -- not because they can do things a little bit better."

CNN's Business Correspondent Jim Boulden contributed to this report