XPs Outsize Expectations

Microsoft will lavish $200 million on the launch of Windows XP. Intel and other partners will drop another $800 million on XP-related marketing campaigns.

Microsoft will lavish $200 million on the launch of Windows XP. Intel and other partners will drop another $800 million on XP-related marketing campaigns.

Why does a monopolist need to advertise its products at all? Im not being totally facetious. To some extent, it doesnt matter whether anyone wants or needs Windows XP — or even knows it exists. Its success is almost a foregone conclusion, because Windows XP will be bundled on practically every PC shipped starting Oct. 25. And never mind that Microsoft also has a de facto monopoly with Office, another way it has forced users to upgrade to a new operating system (OS).

But much of Microsofts sales depend on PC sales, and the devastated PC industry has been in desperate need of something — anything — that gives people a new reason to buy a computer. Windows XP is the industrys collective bet to revive the flatlining PC. Its supposed to run faster, crash less and include a bunch of snazzy features. Windows XP is, Bill Gates has said, "the best operating system that Microsoft has ever built." Well, it may be better than Windows 9x, but I doubt Windows XP will be the shot of adrenaline that Microsoft imagines. The company claims 144,000 people have ordered preview editions of Windows XP so far. Im not sure Id call that a groundswell of interest.

Theres just nothing about Windows XP that can stimulate enormous demand. Microsoft, as usual, promises its new OS will have greater stability and improved performance, but analysts say Windows XP is roughly equivalent in these respects to the year-and-a-half-old Windows 2000, which shares the same NT code base as XP and which has had lower-than-expected uptake. Other than that, Windows XP incorporates relatively minor improvements, such as faster boot times, an integrated CD-burning media player and real-time messaging client, and — control your excitement — a larger Start menu. Then consider that there are a few reasons people will refuse to adopt Windows XP, sensing Microsofts attempt to assume control beyond the desktop. For example, Windows XP requires you to register with Microsofts Passport authentication service to use some applications.

None of whats new in Windows XP necessarily justifies the time-consuming, expensive and disruptive process of upgrading or replacing existing Windows machines. By contrast, when Windows 95 launched six years ago, it had at least two obvious killer advantages over Windows 3.x: a radically improved interface and native networking support.

The PC industrys more deep-seated problem is that it continues to act as if customers will upgrade in lockstep. That axiom does not hold anymore, because the market has become saturated and existing PCs do almost everything users want them to do.

Now Wintel finds it needs a billion-dollar marketing blitz to cajole people into believing they need a new computer. And even that may not be enough to lift the industry out of its malaise.