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PC OEMs May Have Go-Ahead to Ship XP Early

This week, sources close to several major PC OEMs claimed that Microsoft Corp. had authorized their companies to ship computers pre-loaded with its Windows XP operating system (OS) at least one month prior to XP’s official debut in late October.

The software giant continues to deny these claims, but analysts and industry watchers alike say that such a gambit on Microsoft’s part could actually make a lot of sense.

Even before the U.S. District Court of Appeals for the District of Columbia found that Microsoft had illegally commingled code between its Windows 98 operating system and its Internet Explorer Web browser, consumer advocacy groups, state attorneys general and lobbyists for Microsoft’s competitors began crying foul over the anticipated degree of software code commingling – or “product tying” – in Windows XP.

In the wake of the appellate court’s decision, several of the state attorneys general – Iowa Attorney General Tom Miller and Connecticut Attorney General Richard Blumenthal, among them -- had made noises about obtaining a preliminary injunction to prevent XP’s shipping.

In this regard, says Kevin Fumai, an antitrust scholar with Seton Hall University, the sooner that Microsoft ships XP, the better.

“Once they’ve got XP out there, it’s going to be hard for anyone to get an injunction. Obviously, from the point of view of the state attorneys general or anyone else, if you’re going to push for an injunction, it’s a lot easier to push for one before they ship [XP],” he confirms. “It’s just really rare, but not unprecedented, for the court to grant an injunction against a product that’s already shipping.”

Microsoft is also feeling tremendous pressure from PC OEMs to get XP out the door. PC Makers are suffering through what market research firm IDC has estimated to be a 17 percent slump in year-over-year shipments of computer systems. Most analysts and PC manufacturers expect that Windows XP will help to drive shipments of new systems – although the exact impact that Microsoft’s next-generation OS will have is hotly debated.

Rob Enderle, a senior analyst with Giga Information Group and a long-time Wintel watcher, says that his company projects that any delay in shipping XP could result in $7 billion in lost revenue for computer makers, for peripheral manufacturers and for software vendors.

“The hardware OEMs, particularly the ones in trouble like Compaq and HP, absolutely need this product to ship on time, and even earlier if possible,” he confirms.

Enderle says Microsoft is not technically giving OEMs the go-ahead to ship XP early.

“Hardware OEMs always get the product early, just like they did with Windows 2000 when they were able to start selling customers systems in January,” he notes. “That doesn’t mean that they’re going to start shipping these systems right way, however. If there’s nothing that changes as far as the release date of the product, this extra time is used to qualify the hardware and to get it in the channel. If there’s any delay to the product, this is the time that’s eaten up.”

At the same time, however, Enderle expects that OEMs will be able to start selling XP-based systems to enterprise customers as soon as they receive the RTM code from Microsoft.

“This really just affects the consumer markets,” he says. “A large corporate customer can get it as well as soon as the discs are cut. So if you’re a big corporation, and if you’re buying thousands of machines, there’s a reasonable chance that you can get this thing early.”

About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.

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