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WINDOWS XP MAY NOT BE X-TRA SPECIAL FOR PC USERS

Microsoft Corp.'s Windows XP personal computer operating system went on sale today with a flurry of events and promotions though analysts say most consumers and businesses will wait until next year to buy the program.

Microsoft chairman Bill Gates appeared onstage at the Marriott Marquis with Mayor Rudolph Giuliani today and saluted the city's mayor and its people for their "courage, determination and resilience" and went on to tout a product that for Microsoft lays the foundation for a new Internet-focused direction.

"Today it really is actually the end of the MS-DOS era," Gates told an audience of about 1,500 guests and media, a reference to Microsoft's original operating system, the underpinning of all the company's consumer-oriented Windows products until XP.

The idea behind Windows XP is to get consumers more connected -- with better Internet tools and features including built-in wireless networking support.

And that positions Microsoft well. As a provider of Web-based services and an operating system owner, it is uniquely positioned to be a gatekeeper.

For users, the $99 upgrade to XP Home is Microsoft's best-yet stab at a user-friendly operating system, with plug-and-play support for a plethora of digital gadgets, an emphasis on whiz-bang multimedia and an underlying code base that is practically crash-proof.

"It's got a lot of nice new features. But the most important thing is that it really is a stable operating system. It doesn't crash," said Michael Miller, editor-in-chief of PC Magazine.

Windows XP, an improved version of the Windows program that runs 90 percent of PCs, has garnered little interest from consumers and companies because of slowing demand for computers and software amid a slumping economy, analysts said.

Microsoft will sell 5.4 million copies of XP on new PCS by the end of this year, 4.4 million of the home edition and 1 million of the business version, research firm Gartner Inc. has forecast. In 2002, Gartner expects sales will increase to 56.9 million -- 41.5 million home and 15.4 million business copies.

"Companies are going to take longer to evaluate the software and decide what to do with it," said Gartner analyst Mike Silver. Gartner's estimates don't include copies sold to customers who upgrade older PCs with Windows XP.

Demand for Windows XP is a fifth of what it was for Windows 95 when it was released, said Rob Enderle, an analyst at Giga Information Group.

Windows XP is the largest software maker's biggest overhaul of Windows for home use since Windows 95. The company is spending $200 million to promote the product and staging publicity events, just as the company did for Windows 95.

In Amherst, dozens of people lined up outside the CompUSA store on Niagara Falls Boulevard to be among the first in the area to buy Windows XP at 12:01 this morning.

"I hope this runs better" than previous Microsoft software, said Eric Beljan of Eden. The company's last operating system "crashes too much."

The University at Buffalo student said he bought Windows Millennium Edition less than a year ago but was unsatisfied with its performance on his home computer.

The store, whose salespeople painted their faces XP colors of blue and green, was also holding a late-night sale for games, monitors and other technology products, swelling the turnout for the midnight launch event.

Marketing for Windows XP ranges from a large banner in New York's Times Square to taxicabs in Finland that give riders a free trip and a copy of the program.

Home computer users are Microsoft's real target with XP.

The new version contains more new features than operating system half-steps Windows 98 or Millennium Edition, including programs for listening to and recording music, playing videos and editing and organizing digital photographs. A new feature called Windows Messenger lets users communicate instantly with others using text, voice and video.

The home version also is less likely to crash than previous versions though it doesn't offer enough compelling features to push cost-conscious consumers to buy a new PC, analysts say. Few consumers plan to replace older PCs until the economy improves, analysts say. Many customers won't be able to run Windows XP on their current computers.

"It's got a lot of nice new features. But the most important thing is that it really is a stable operating system. It doesn't crash," said Michael Miller, editor-in-chief of PC Magazine.

News Business Reporter Fred Williams contributed to this report.

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