Microsoft Launches Windows XP

Photos Reuters Photo

By Lucas van Grinsven and Bernhard Warner

LONDON (Reuters) - U.S. software giant Microsoft officially launched the latest version of its flagship product Windows on Thursday, kicking off a $250 million marketing campaign for what it dubs its hottest product to date.

The widely anticipated operating system, Windows XP (news - web sites), which has been pre-installed on new personal computers for many weeks now, is available as a separate product in shops as of Thursday. It sells for $199 for the full version and $99 for the upgrade.

True to style, Microsoft used its $36.2 billion cash pile to throw launch parties around the globe, schmoozing thousands of customers and business partners. Microsoft's own October festivities attempted to rekindle memories of the high-profile Windows 95 launch when customers lined up in front of shops at midnight, boosting Microsoft's top line.

Although this time nocturnal queues were few and far between, the software behemoth made sure its biggest names hit the streets plugging the product.

Microsoft's Chief Executive Steve Ballmer spearheaded an event in London, while co-founder and Chief Software Architect Bill Gates (news - web sites) in New York was scheduled to host the biggest corporate bash since the September 11 attacks on the United States.

The software release is much more than a simple operating system to run a computer. Microsoft has decided to bundle an unprecedented number of applications, such as a Web browser, an email program, an instant messenger and a digital photo editor.

``Windows XP is the first release in 10 years where we have been able to bring all our innovations together,'' Microsoft President and Chief Executive Steve Ballmer told journalists at an Italian preview on Wednesday.

In so many words Ballmer also admitted previous Windows versions, which dominate the industry and can be found on 90 percent of all desktop computers, were complicated to use.

``This is the beginning of the end for technology that baffles, confuses or puts a barrier in the way of helping you do what you want to do,'' he said in a statement on Thursday.

``This is the product that will start making computing as easy to use as picking up the telephone or turning on the television,'' Ballmer added.

The new version does away with the decades-old DOS fundamentals on which its predecessors were built, sharing instead the basic source code with Windows 2000 (news - web sites), which is used predominantly in corporations.

``It should provide more stability than previous Windows versions,'' Andersen IT consultant James Alexander told Reuters.

HOPES THAT XP WILL BOOST COMPUTER MARKET

Computer manufacturers hope Windows XP will give the ailing PC industry a much needed shot in the arm.

Global shipments of PCs tumbled by over 10 percent in the third quarter, its first decline since 1986, according to recent research from Gartner Dataquest.

In a now familiar Microsoft tactic, the latest Windows version requires more computer memory and a faster microprocessor, forcing businesses and consumers to upgrade their PC or, rather, buy a new one.

``People need a powerful PC to run XP, which is why PC makers love it,'' Alexander said.

Ballmer on Wednesday recommended to upgrade any PC older than two years if people wanted to run XP, but analysts questioned whether XP is the blockbuster improvement needed to convince corporates to migrate to the new platform.

The merits of Windows XP have been discussed weeks before Ballmer took the stage in London on Thursday. Internet users have vented criticism, praise and, especially, technical queries in hundreds of thousands of chat room messages.

Many complained some of their old hardware and software did not work properly under XP. But security experts roundly lauded the improved security of Windows XP against likely viruses and hacker attacks.

However, it is expected much attention will be paid to the impact of Microsoft's decision to integrate dozens of Web tools that until now had to be separately installed, and could only be obtained from a variety of vendors.

The European Commission (news - web sites) is currently probing Microsoft for illegally tying its Media Player with Windows. This software program allows PC users to receive video and audio over the Internet, and competes with products from U.S.-based RealNetworks and Apple Computer.

This is not the first time Microsoft has been the object of scrutiny because of its software bundling practices. It marginalized Netscape by tying its rival browser Internet Explorer into its operating system.

Similar concerns are already being expressed by competitors.

``Our users have to download their Player over the Web. It doesn't come pre-installed on their PC,'' RealNetworks European vice president Joanna Shields told Reuters.

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