PC makers may ship Windows XP early

Some PC makers are preparing to ship computers and laptops running Microsoft's Windows XP operating system a month ahead of the expected October release date, two major manufacturers confirmed Wednesday.

Showing yet another sign of urgency to get its hotly debated software out on the market, the embattled software maker is expected to allow its PC distributors to sell machines running Windows XP as early as September. Microsoft has said the operating system will debut on Oct. 25, but it has seemed increasingly unlikely that the company will reach that date unscathed as legal and industry criticism mounts against the software.

Compaq Computer Corp. confirmed that it will sell computers with Windows XP installed through its online distribution channel about a month before those computers hit retail shelves in October.

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

A spokesman for another major computer manufacturer, who asked not to be identified, also confirmed Microsoft's plans to authorize early shipments of PCs with XP installed. He characterized the move as a decision made swiftly, and said that pressure to get the operating system out before critics were able to win a court injunction, which would delay the release, may have contributed to a earlier-than-expected release date. 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.

The Redmond, Washington software maker Tuesday appealed to the U.S. Supreme Court in the antitrust case, a move that some legal experts said could help prevent court-ordered interference with the Windows XP launch by drawing out the legal process.

Microsoft, however, strongly denied any plans for an early release. "Our schedule has not changed and we remain on track for an October release," said Jim Cullinan, a Microsoft spokesman for the Windows XP division. "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."

Rob Enderle, an analyst with Giga Information Group Inc., also expressed doubt that customers will be able get their hands on an early copy of the final operating system. "Oct. 25 is when everyone is going to be able to get Windows XP," he said.

The move to ship computers running the new operating system early is typical industry practice, he said. Manufacturers use the early shipments to stock their inventory channels so they are ready for the public release date.

"Microsoft has a team of lawyers that will sit on top of any (PC maker) who tries to sneak out early releases," Enderle said.

Microsoft has also not changed its planned date to ship the Release to Manufacturers (RTM) version of the software, Cullinan said. The company has not said publicly what that date is, though analysts have speculated that PC makers will receive the operating system in its final form in late August. Cullinan did not confirm that time period.

Microsoft and its distribution partners are placing big bets on the release of the operating system as a way to drive consumers and corporate customers to either buy a new machine or upgrade to the new operating system. Sales of PCs in the U.S. are expected to fall more than 17 percent in 2001 compared to a year ago, according to research firm International Data Corp. Global sales are also expected to grow only about 5.8 percent this year, the research firm has said.

Microsoft's top executives in charge of the operating system division said in July that the company planned to throw more than US$200 million behind Windows XP to market the product in the first four months of its release, hoping to jump start the slumping sector. The company has identified as many as 320 million potential customers of its software that it will target in its marketing effort, Jim Allchin, group vice president for Windows at Microsoft, said in July.

Additionally, many computer makers are readying their marketing arsenal for the release of Windows XP. Gateway Inc. and Compaq are planning a big push for the initial release of computers running the operating system, both companies said. Microsoft announced a marketing program in June with more than 15 computer manufacturers to start selling "XP-ready" computers -- PCs installed with Windows Millennium Edition but configured with drivers and hardware specifications to support the new operating system.

As part of that program, Compaq has been selling its XP-ready machines with a $29.95 XP upgrade fee, according to Compaq's Albritton. Similarly, Gateway sells computers with an offer to upgrade from Windows ME to Windows XP for only $15. A Gateway spokeswoman would not comment, however, on when the company will make the operating system available. The actual date depends on Microsoft's ability to get the final software code finished ahead of schedule.

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

George A. Chidi, Jr., an IDG Correspondent in Boston, contributed to this report.

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