Microsoft denies Xbox manufacturing glitch

Microsoft Corp. this week insisted that it would ship its Xbox video game console on schedule, despite a report from a financial analyst firm stating that manufacture of the console had fallen as much as four weeks behind schedule because of a technical glitch.

Eric Ross, an analyst with the investment banking firm Thomas Weisel Partners LLC in New York, wrote in the report issued earlier this week that "a flaw in Intel's motherboard design for Xbox has likely set back the initial build date by 3 - 4 weeks." An Intel Corp. spokesman denied the claim and referred questions to Microsoft.

The software maker denied any problem with Intel's motherboards and said Microsoft is on target to ship Xbox on Nov. 8 as planned, in line with a schedule announced at the E3 (Electronic Entertainment Expo) gaming show in Los Angeles earlier this year, Microsoft spokesman James Bernard said. At the gaming conference, Microsoft said it would have between 600,000 and 800,000 units ready by the time of the launch.

The report from Ross cites several unnamed sources supposedly familiar with the matter. Despite any manufacturing problems, Microsoft is unlikely to miss its goal of shipping 1.5 million units during 2001, Ross wrote. "Delays of this sort are common for PC hardware manufacturers," he noted.

The Xbox is Microsoft's first entry into the home-video gaming market, which is currently dominated by Sony Computer Entertainment Inc., Sega Corp. and Nintendo of America Inc. The Xbox is based on a 733MHz Pentium III processor from Intel, and will also include a DVD (digital versatile disc) drive, Ethernet ports for connecting to the Internet at high speed, and graphics chips from NVidia Corp. The console will be priced at $US299, Microsoft has said.

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Douglas F. Gray

PC World
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