PC makers selling Windows XP early

Caroline Humer

NEW YORK: Top personal computer makers, including Dell Computer Corp., said

on Wednesday that they have begun selling some PCs with Microsoft Corp.'s widely

anticipated new Windows XP operating system four weeks ahead of its scheduled

launch, in a speedy turnaround that analysts say is designed to help slumping

sales.

After a year of slow sales, Microsoft, semiconductor maker Intel Corp. and

the PC makers such as Compaq Computer Corp. Corp. and Gateway Inc. have been

counting on an boost in sales from the launch of XP, analysts said.

The PC makers said they would ship the PCs with the latest version of the

dominant operating system on Sept. 24. That will put XP into the hands of

businesses and consumers about four weeks ahead of the scheduled retail launch

date on Oct. 25.

"They're looking at this and saying we need something to create a

compelling story to get people back into the stores and the hope is that this is

what's going to do it. I don't think it's going to work," said Steve

Kleynhans, an analyst at consultancy Meta Group in Stamford, Connecticut.

Kleynhans said this is the fastest turnaround ever of a new operating system

by PC makers, who received XP in late August.

"Typically in the past we've seen about eight weeks between the release

to manufacturing and the first machines hitting the street. This time they were

in a little bit more of a hurry to get it going," he said.

Dell, Compaq and Gateway said they were selling XP-systems over the Internet

or by phone, but Hewlett-Packard Co. said it was also selling XP-based PCs in

its retail locations.

While XP's formal launch is Oct. 25, Microsoft Chief Executive Officer Steve

Ballmer said Wednesday that computer makers can release XP to their customers

when they are ready and that because of retail store inventories, customers who

buy directly from the PC maker end up with XP first.

"We tried to choreograph this thing so everything comes together at

once, but it is certainly the case (that) the people who sell directly over the

Internet are able to supply XP with their new PCs faster than people who have to

clean out a retail channel and supply new hardware," Ballmer said at a

Chicago Software Association luncheon in Chicago.

The move to XP is the biggest consumer operating system overhaul in six years

for Redmond, Washington-based Microsoft. Many companies, including the world's

No. 1 computer maker, Dell, have said they expect XP to boost sales of personal

computers, which have been weak, this fall. Existing PCs would need massive

upgrading to run the new system.

Microsoft and semiconductor maker Intel also need PC sales to improve this

fall.

"I think the issue that Microsoft and Intel are dealing with this

particular holiday season is that they really want to get the Pentium 4

(microprocessor) with its low-cost system platform out there in time for holiday

season," said Roger Kay, an analyst at research firm IDC.

"And in time for the holiday season means that manufacturers have to be

shipping anywhere between now and the end of October," Kay said.

Hewlett-Packard said it began accepting orders for XP-based machines in its

retail outlets, as well as over the Internet and by telephone on Sept. 17. Dell

says it began selling its Inspiron 2500 notebook and the Dimension 4300 desktop

on Sept. 14, with the Windows XP operating system as an option.

"Traditionally, we've had systems ahead of the launch," a Dell

spokesman said.

Compaq, which recently agreed to merge with competitor Hewlett-Packard, said

that it also began selling personal computers with the new operating system last

week and will ship on Sept. 24.

Gateway, the fourth largest computer maker, had previously said that it would

begin shipping machines to consumers and businesses with Windows XP on Sept. 24.

It began pre-sales of the computers on Sept. 4, according to a spokeswoman.

International Business Machines Corp., which no longer sells PCs to

consumers, said it planned to launch XP for its corporate customers on the

scheduled Oct. 25 launch date.

(C) Reuters Limited 2001.