Microsoft Delays Windows Vista Release to 2007

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Microsoft is delaying the long-awaited update to its Windows operating system. The consumer version of Vista was to be released by the end of the year. Late yesterday Microsoft said Vista needs more testing.

Now it won't be ready for Christmas, and that's bad news for companies that make and sell personal computers, as NPR's Wendy Kaufman reports.

WENDY KAUFMAN reporting:

Vista is the first major overhaul of Microsoft's operating system in roughly five years, and it's the company's first significant effort in integrating web-based content with the computer desktop.

Microsoft is counting on this to give the company a much-needed boost in the rapidly changing technology industry. Among other things, the new operating system is slated to offer better security, an improved user interface, and a better and faster search. It will be a major gaming platform, and users will be able to display and record HDTV on the computer.

Microsoft has been working on Vista for years, and this is not the first time its launch has been delayed. While the business version of the software will be out in November, the consumer version won't be out until January.

In a hastily called teleconference, Jim Alchen, a senior Microsoft executive, told reports and analysts that the company needed the extra time to ensure the highest quality product; especially for the security features.

Mr. JIM ALCHEN (senior Microsoft executive): This is a major release. This is a blockbuster-type release, and we're just trying to be forthright about where we are in terms of needing a few more weeks for quality.

KAUFMAN: Even with the delay, some computer manufacturers might have been able to build and ship Vista machines prior to Christmas. But other manufacturers could not. So Microsoft decided to hold off for everyone to ensure a level playing field.

Ted Shadler, a vice president and technology analyst at Forrester Research says no one in the industry should have been surprised by yesterday's announcement. He says Microsoft began hinting early this year that Vista might not be ready for the Christmas season.

Mr. TED SHADLER (vice president and technology analyst, Forrester Research): Vista is a big bet for Microsoft. If they get it wrong, if it fails, if consumers are disappointed or if companies are disappointed, then it's really going to set the company back. Its better to delay the shipment and get all the bugs worked out then it is to ship a buggy product.

KAUFMAN: Shadler says the impact on Microsoft won't be that great. But for others in the computer industry, it may well be.

Computer sales are greatest at Christmas time. But as analyst Rob Enderle suggests, consumers want the latest version, not one that's going to be replaced in a month.

Mr. ROB ENDERLE (principle analyst with the Enderle Group): For those folks that were planning on buying new PC's, they're not going to be buying them. This is going to have negative implications for everybody that build applications on the platform, to folks that build components for PC's, to those folks that sell PC's in the U.S. and the rest of the world. So it's going to be painful.

KAUFMAN: Spokesmen for many of the PC manufacturers tried to put the best face on the situation. Typical were the comments of an executive vice president at Hewlett-Packard who said, We strongly support Microsoft's decision to prioritize quality in determining the schedule for Vista.

There is at least one technology company that might actually benefit from the delay of Vista, Apple Computer.

Again, Rob Enderle.

Mr. ENDERLE: Apple is expected to also have a new platform out at the end of the year. It has new hardware coming out on the platform. If they're able to execute and people are excited about buying new machines, only Apple is going to have those products.

KAUFMAN: Shares of Apple Computer rose slightly in after-hours trading, while shares of PC makers Dell and HP fell about two percent.

Wendy Kaufman, NPR News, Seattle.

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