Microsoft Preview Windows XP

S E A T T L E, Feb. 14, 2001 -- Hoping to appeal to consumers, Microsoft Corp. says its new Windows XP desktop operating system will make everything from downloading music to playing home videos quicker and easier.

At a news conference previewing the new system, which is to bereleased in the second half of this year, Vice President JimAllchin said Tuesday that XP would be as useful for his mother asfor businesses.

Touting the many functions of the new system, Microsoft ChairmanBill Gates said the product would “meet the demand that theWindows setup be the center” of any personal computing system.Allchin demonstrated the ease with which people can use Windows XPto download music for a morning run, view pictures from a familyvacation or watch a DVD movie.

Speaking at the Experience Music Project, the rock ‘n’ rollmuseum built by Microsoft co-founder Paul Allen, Gates repeatedlyreferred to the “experience” of using XP. But neither Gates norAllchin could point to more than a handful of truly new experiencesthat the system has to offer.

Shawn Sanford, group product manager for Windows, also said thecompany was aiming for “a new look and a new experience” with XP,but he also stressed the product’s new reliability and familyfriendly features.

A First

Windows XP is the first consumer-oriented system to use the morereliable Windows 2000 software code, which was designed forheavier-duty corporate and Internet users. It also features a fewnew gadgets that will appeal to families and nonprofessional users.

With XP, multiple users can save files on one computer, but keepthose files private from others using the same computer. It alsoallows an authorized person on one computer to access anothercomputer over the Internet, to fix problems. Also with Windows XP,people can access their own computer from another computer througha new remote access function.

Along with the additional interactive features, Sanford said thenew version of Windows offers built-in security features, such asencryption, but that the company also didn’t want to limit peoplewho wanted to interact heavily over the Internet or other networks.

“It’s a fine balance,” he said.

He also said that, although the company is naturally concernedabout the copyright issues raised by downloading music, videos andpictures, “I don’t look at Windows as being policing.”

Gates said XP cost more than $1 billion to develop, above thecost of the Windows 2000 system it is based on, but declined to sayhow much it would sell for. He called Windows XP “the mostimportant release since Windows 95,” the much-hyped operatingsystem that also was geared toward the consumer market.

Rob Enderle, a research fellow with Giga Information Systems whofollows Microsoft, said the company’s current marketing plan issimilar to the push it gave to Windows 95, a runaway hit forMicrosoft.

But Enderle said the market has changed greatly since 1995.Sales might be hurt by a softening economy and the rising price ofelectricity in the West, he said.

And while people in 1995 were hungry for faster operatingsystems, people now are more focused on getting on networks and theInternet, which are still relatively slow, Enderle said.

“It doesn’t do you any good to have a Ferrari when the speedlimit is 20 miles an hour,” he said.

Henry Blodget, an analyst who follows Microsoft for MerrillLynch, said Windows XP’s success will largely depend on the successof the personal computer market in general.

“Relatively few consumers are going to rush out and buy a newoperating system to install on their existing PC, so the questionis, how much new demand is there?” Blodget said.

Blodget thinks some people have been holding off buying acomputer until XP comes out, but he is still predicting that PCsales will slow considerably in the coming year, especially if theeconomy is weak.

Gates dismissed those concerns, saying he thinks the market willbe boosted by the new product.

“What it takes are new experiences” to increase growth in thePC market, he said.