M$ kills Christmas 2006

Microsoft's Windows Delay Threatens to Erode Demand (Update2)

March 22 (Bloomberg) -- Microsoft Corp.'s delay in the next version of
Windows software sent shares of computer makers lower on concern a January
release will wipe out demand during the holiday shopping season.

PC makers were relying on a November release of Windows Vista to bolster
holiday sales that account for about 30 percent of purchases. Redmond,
Washington-based Microsoft, the world's largest software maker, was already
two years late on the project and hasn't released a new Windows since 2001.

``Few things could have done more damage to the 2006 PC market than the slip
of Windows Vista,'' Rob Enderle, president of San Jose, California-based
researcher Enderle Group, said in an interview. ``This will have an adverse
impact on a broad cross-section of components and platform PC suppliers.''

Shares of Microsoft, PC makers and chip manufacturers fell. The PC industry
will lose more than $4 billion in sales this year from the delay, Gartner
Inc. analyst Charles Smulders said. Microsoft gets about 31 percent of its
revenue from Windows, and the delay may cause it to lose almost $500 million
in the holiday quarter, said Charles Di Bona, an analyst at Sanford C.
Bernstein. The company is depending on Vista to revive sales growth.

Microsoft will this week name executive Steven Sinofsky to head the Windows
group, taking over duties from James Allchin when he retires as planned
later this year, the Wall Street Journal reported, citing people familiar
with the situation.