Microsoft has given PC makers the go-ahead to ship Windows XP as much as one full month before the operating system's official Oct 25 launch date, sources close to four major PC makers said.
Computer makers plan to debut PCs and notebooks with the new operating system in late September, a move that could help jump-start stagnant sales. How soon customers could receive the PCs from the manufacturers is not clear, however, because the testing process could be more complicated for this release of Windows than for its predecessors.
"The industry is hoping to see some kind of upgrade cycle starting with XP," said ARS analyst Toni Duboise. The early release from PC makers "means we could start out the fourth quarter (shipping PCs) with XP; it could only be beneficial."
For Microsoft, the early release of Windows XP has an additional benefit. The company is advancing its release schedule to ship Windows XP ahead of any possible injunction that would delay the new operating system's debut, analysts said.
While a federal appeals court in late June threw out a lower court's order breaking Microsoft into two companies, the bulk of the monopoly case emerged intact and a lower court is free to determine a remedy in the case.
"Because a new remedy would be forward-looking, that could include (Windows) XP," said Andy Gavil, an antitrust professor with Howard University School of Law. "There's no reason to think the government is not considering an injunction against XP."
Microsoft on Tuesday asked the Supreme Court to reconsider the appeals court ruling that the software maker abused its monopoly power. According to some analysts, the action could make it more difficult for the Justice Department and 18 states to seek an injunction against Windows XP.
Microsoft could send PC makers the final--or gold--code for Windows XP as early as Aug 15, or about two weeks ahead of schedule, the sources said. That would allow PC makers to sell systems with Windows XP installed in September. But the sources warned that Microsoft could change plans at any time, and that nothing is certain until the code actually ships.
Consumers looking to upgrade existing PCs would have to wait until October for the retail version of Windows XP to ship. Businesses subscribing to one of Microsoft's licensing programs could begin upgrades by late September, sources said.
Along with Windows XP's shipment, Microsoft also is set to release Internet Explorer 6 sometime in the next week. The Web browser will be included with Windows XP and will be available for other Microsoft operating systems.
Jim Cullinan, Windows XP lead product manager, declined to discuss the timing of Windows XP's release or Internet Explorer's ship date, other than to say, "we are on schedule to launch (Windows XP) on Oct 25."
Sources close to four PC makers said that they had been instructed by Microsoft not to promote the Windows XP systems before Oct 12. Those computer manufacturers selling through dealers could ship PCs to stores starting Sept 17.
Neither move--early release of the gold code or availability on new systems--would be unprecedented. PC makers, for example, also started selling previous releases of Windows, including Windows Me and 2000, ahead of their launch dates. In the case of Office XP, Microsoft released gold code nearly two months ahead of the official May 31 launch, with some PC makers selling the productivity suite on new systems about 30 days earlier.
PC makers, looking for a big sales boost from Windows XP, are hoping the new systems will appeal to back-to-school shoppers during a period typically marked by strong PC sales.
"At the least, XP will get people to come out to kick the tires, so to speak, whether they buy a Windows XP PC or not," said IDC analyst Roger Kay.
US PC sales declined 8.1 percent during the second quarter, according to IDC. Kay questioned "whether XP will really do much" for holiday sales whether it's available to some in September or everyone in October.
Duboise agreed. "I don't see a lot of people standing in line for XP," she said. "It might start a slight upgrade cycle, but I don't think it will make a big difference."
Getting Windows XP on new systems ahead of the scheduled Oct 25 launch could help Microsoft fend off possible injunctions against Windows XP, which is an upgrade from Windows 95, 98, Me and 2000. Sen Charles Schumer, a New York Democrat and member of the Senate Judiciary Committee, last month asked the Justice Department and 18 states to seek an injunction delaying Windows XP's scheduled launch.
Software maker InterTrust Technologies already has asked for an injunction delaying Windows XP, arguing Microsoft's product-activation technology violates four InterTrust patents.
Publicly, Microsoft Group vice president Jim Allchin said the company had no contingency plan should an injunction be issued against Windows XP. But sources close to Microsoft said the company is concerned about the possibility.
In fact, Microsoft may be in the process of reevaluating the schedules for a number of forthcoming products, including Blackcomb, Windows XP's successor and the first version to more fully support the company's ambitious .Net software-as-a-service strategy. The company contacted a number of analysts last week about pushing back Blackcomb delivery to 2005 from 2003.
"Microsoft's view of how they were able to link the desktop and Web-based services has changed since the antitrust appeals judgment," said Chris LeTocq, an analyst at Guernsey Research. The delay "might be the result of having to re-architect the OS because of antitrust issues or because of feedback from developers on .Net."
Still, a recent appeals court order rejecting the government's request to expedite the trial makes "getting an injunction against XP pretty tough--but not impossible," said Bob Lande, an antitrust professor with University of Baltimore School of Law.
The faster Microsoft can get Windows out the door, the more "unlikely a court is to issue an injunction" against it, Lande said.
"What do they say, possession is nine-tenths of the law?" Kay asked. "Their possession of their market is harder to take away" after Windows XP ships.
The code is gold
Signs that Microsoft is putting the finishing touches on Windows XP can be seen in the most recent beta builds. Microsoft last week issued the final Windows XP release candidate--a testing version--to as many as 250,000 people. Since the release of that version, called build 2526, one other, 2532, has leaked out of Microsoft.
The company also may have completed work on Internet Explorer 6. The version that shipped with Windows XP Release Candidate 2, build 2526.0000, has been replaced with 2530.0001. Microsoft reportedly sent a letter to beta testers indicating that version would be the last before final release.
Microsoft had set Aug 25 as the official release of Windows XP gold code to PC manufacturers and for preparing boxed copies for retail. But computer makers have been told gold code could be released much earlier, with some manufacturers reporting Aug 15 and others Aug 20.
Typically PC makers need four to six weeks after gold code is released to do final testing and preparation before selling new systems. That Microsoft would give the go-ahead for sales starting around Sept 25 is not entirely surprising, said LeTocq.
"Launch actually means availability at retail," he said. "The difference is the time it takes to manufacture retail boxes, get them into the store, and then create a mass-market media event called a launch."
In mid-July, Microsoft revised its Windows licensing agreements, giving PC makers more freedom to customize the XP desktop and Start menu. Since then, PC makers have been brokering deals with AOL's online division and other service providers for placement on the desktop and Start menu.