Demand for Windows XP is tied to consumers' willingness to buy new PCs because older machines won't run the program effectively.
Windows XP will work well on PCs purchased beginning in the 1999 holiday season, Microsoft said. Some analysts interpret that to mean about half of existing PCs won't be able to run XP.
Others, such as Upin, place the number at as many as 75 percent.
Even so, Windows XP will appeal to customers, said Shawn Sanford, Microsoft's group product manager for Windows.
"In the best of times and the worst of times people buy things that are important to them," Sanford said.
But Microsoft's position depends on factors outside its control, such as the occurrence of more terrorist attacks, said Giga's Enderle.
"Right now indications are the product will fail" to catch on, even over several quarters due mostly to poor economic conditions, he said.
Enderle said his assessment is based on the assumption that there will be more attacks. If that doesn't happen, spending could recover more quickly, he said.
Microsoft Group Vice President Jim Allchin, who runs the Windows group, has said that about 140 million PCs are least three years old, making them ripe for replacement. Analysts said many customers keep PCs longer than three years.
Windows history:
1981: IBM ships its first PC, loaded with Microsoft PC-DOS (Personal Computer-Disk Operating System). 1983: Microsoft debuts MS-DOS (Microsoft Disk Operating System), which supports hard drives. Microsoft also announces it will create an operating system based on dragging and clicking on computer screen icons. Microsoft dubs it "Windows." The technology was first seen by Bill Gates and Apple's Steve Jobs at a Xerox research facility. Both accuse the other of ripping off the technology. 1985: Microsoft ships the first version of the Windows software, 1.0. 1988: IBM and Microsoft break relations after the computer maker accuses Microsoft of creating a rival market. 1990: Microsoft unwraps Windows 3.0. Microsoft now sells a million copies of Windows a month. 1993: Microsoft publishes Windows NT 3.1, a corporate computing operating system that guards against crashes, a regular Windows problem. NT contains the core software for Windows XP. 1995: Windows 95 launched. New operating system includes "plug-and-play" capabilities that simplify adding peripherals, the ability to name files with regular words, and a start menu and task bar for easy access to applications. 1998: Windows 98 debuts. It includes Microsoft's Explorer Internet browsing software. 2000: Windows Millennium Edition: A slight upgrade from Window 98 that includes software to manipulate digital media. Today: Windows XP (for eXPerience), consolidates various Windows lines into new corporate and consumer versions, with simplified networking capabilities and close ties to Microsoft's online strategies.
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