Windows Vista delayed

Microsoft's new operating system won't launch widely until January, although some "volume-licensing customers" will still get it this year.

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Microsoft today announced a delay of Windows Vista that will mean PCs with the new operating system won't go on sale until January.

The software maker said it will still wrap up development of the operating system this year and make it available to volume-licensing customers in November. However, Microsoft said that a delay of a few weeks in Vista's schedule meant that some PC makers would be able to launch this year and others would not. As a result, Windows chief Jim Allchin said the company is delaying the broad launch of the product until January.

During a conference call earlier today, Windows chief Jim Allchin spoke to reporters and analysts about the Vista delay.

"We needed just a few more weeks, and that put us in a bubble...where some partners would be impacted more than others," Allchin told reporters and analysts.

The delay is the latest setback for Vista. Microsoft scaled back several key features of the operating system last year in order to try to ensure a 2006 release. The operating system, which has been in development for years, was delayed by, among other things, the fact that Microsoft had to put so much time and testing effort into Windows XP Service Pack 2, a largely security-oriented upgrade to the current version of Windows.

Allchin said that although PC makers were not universal in wanting the delay, there were concerns from some companies that they could not ensure a holiday-quarter launch if Microsoft pushed back its development schedule even slightly.

Analysts have been warning that Microsoft's schedule left little room for error if it was to make a fourth-quarter launch. As recently as January, Allchin expressed confidence that Microsoft would make its deadline, although he reiterated his caveat that quality issues could yet lead to a postponement.

The delay would likely hurt retail PC vendors the most, said Stephen Baker, vice president of industry analysis at NPD Techworld. Dell, which sells most of its PCs directly, could probably handle a delay of a few weeks without too much trouble. Hewlett-Packard and Gateway, on the other hand, have to have their PCs ready for retail partners weeks ahead of when they will actually go on sale and can't change gears as quickly, he said.

"It scares you," Baker said, when asked about the impact of the delay on fourth-quarter PC sales. The PC industry's largest quarter of the year always comes around the holiday shopping season, and expectations were high for that period this year, given the expected introduction of the new operating system.

Microsoft does not expect the move to affect this year's overall PC sales, Allchin said. "There's no (change) to the PC forecast from our perspective," he said. "You can ask the partners what they think."

Allchin also said the product will still launch in Microsoft's next fiscal year, which begins in July, meaning that Microsoft's overall business for next year shouldn't be affected.

Allchin said some of the additional time was for ensuring security levels, and the company is also working on ironing out usability issues.

"We're trying to crank up the security level higher than ever," Allchin said. "This came down to a few weeks. We're trying to do the responsible thing here."

Microsoft released its most recent test version of Vista in February. Late that month, the company also announced plans for six distinct editions of the operating system.

Microsoft had hoped to have a massive marketing push around Vista and Office 2007, which is slated for the second half of this year. It is not immediately clear how the delay will affect those plans.

The delay also impacts PC gamers. At the D.I.C.E. Summit last month, the head of Microsoft's gaming division Peter Moore apologized for the company's "dereliction of duty" when it came to PC games and emphasized how the Vista platform would benefit PC gamers. And while the PC version of Halo 2 never had an official release date, it would now seem unlikely to see release this coming holiday season, given that it will only run on the Vista operating system.

CNET News.com's Tom Krazit contributed to this report.

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