Microsoft to Delay Windows Vista Release

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The delay in Windows Vista caused by Microsoft needing more time to enhance security and other functions will come as a blow to Microsoft partners who were looking forward to a new operating system to boost holiday sales.

"It's a much bigger deal for the computer makers than it is for anybody else," said David Smith, a vice president with Gartner Inc.

Windows Vista is Microsoft's first major update to the company's flagship operating system since Windows XP was released in late 2001, meaning partners will be left with a fifth major holiday season without a new version of the operating system to promote.

"It's not the optimal situation, to be launching the next-generation version of Windows right after the big holiday sales season," said analyst Joe Wilcox with Jupiter Research.

A spokesman for Dell Inc. declined to comment on how the delay might affect sales. In a statement released by Microsoft, Hewlett-Packard Co. said it supported Microsoft's decision to make quality a priority in scheduling the operating system's release.

Microsoft will release some versions of the new operating system for big businesses in November as planned, but the consumer version will be postponed until January, said Jim Allchin, co-president of the Microsoft division that includes Windows.

Wilcox said releasing the system in November to businesses would likely help Microsoft since its business sales are highly profitable while the delay in the consumer release would be most harmful to its partners.

"You can play semantics and say that the operating system is shipping in 2006, but if consumers can't buy it until 2007, PC manufacturers don't have it to sell to them," Wilcox said. "This blow falls on the partners."

The news sent Microsoft shares down 2.5 percent in late-session trading, to $27.05. Earlier the stock fell 15 cents to close at $27.74 on the Nasdaq Stock Market.

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