Fears over Microsoft launch

04-08-2006

Microsoft shares dropped by two per cent in US trading yesterday, after the company appeared to hint at a possible further delay to the release of its new Windows Vista operating system.

The launch of Vista, the first major software update Microsoft has developed since the release of Windows XP several years ago, has already been postponed several times.

Microsoft was due to distribute the product during the second half of this year, but was forced in March to put back its release date for consumers, following quality assurance delays.

Five years into the development of Vista, a Microsoft executive has now cast doubt over whether the company will be ready to launch the product onto the market in early 2007, as currently planned.

Addressing the software giant's annual meeting of financial analysts yesterday, Kevin Johnson, co-president of Microsoft's platforms and services unit, said Vista would be shipped "when it is available".

"We are going to ship the product when it is ready and we are just going to take it milestone by milestone", Mr Johnson said.

His comments follow those made by Microsoft chairman Bill Gates, who last month warned that there was only an "80 per cent chance" Vista would be shipped according to schedule.

Goldman Sachs analyst Rick Sherlund said Microsoft appeared to be hesitating over the release date of its new software.

He claimed that Mr Johnson's comments supported predictions previously made by analysts that Microsoft would not begin to accrue revenue from the widespread availability of Vista until March or April of next year.

"When they hesitate, that's confirmation we were right," he said, adding that Microsoft was known for its tendency to slip beyond initial targets for major software releases.

Corporate customers are currently expected to be able to purchase Vista from November of this year.


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