Bleak timing for Windows debut

By PETER GRIFFIN

Microsoft renews its relentless pursuit of more PC users with the official launch today of Windows XP, the latest incarnation of its ubiquitous operating system software.

Despite the hype, a new catch phrase and a $US200 million marketing budget, analysts warn that uncertain market conditions could conspire to dampen its debut.

Microsoft's advertising campaign for Windows XP was toned down after the September 11 terrorist attacks with the slogan changed from "Prepare to fly" to "Yes you can".

Microsoft New Zealand's Windows platform manager, Jay Templeton, said the company aimed to achieve 25 per cent of its XP sales target for the financial year in the months leading up to Christmas.

Andy Woo, an analyst at research company Gartner, said Windows XP was unlikely to provide the kick start that would revive the PC industry.

"It's nothing to do with the technology, it's nothing to do with the product, it's just that the overall market sentiment is fairly weak."

Australian analysts have scaled back forecasts for the IT industry after the terrorist attacks in the US.

Research company IDC predicts growth of 2.8 per cent in the Australian market this year, down from 10.1 per cent last year. And a decline in the PC market of 5 per cent is now expected.

Gartner's Australian outlook is even gloomier, tipping a PC market decline of between 6 and 7 per cent.

But New Zealand appears to be bucking the trend with IDC maintaining a 3 per cent growth forecast for the local PC market and 6.8 per cent growth next year. Analyst Darian Bird said a strong domestic economy, lower PC penetration and strong vendor competition led New Zealand to outperform larger markets.

Andrew Thompson, at Harvey Norman, said the retailer expected strong interest in XP but that "it was not the best time" for a launch.

The big question is whether people will buy upgrades at $309 for home computers and $599 for office machines - or new PCs with the system - in a slump.