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MSFT > Microsoft Vista delay seen hurting consumer PC cos
Tue Mar 21, 2006 8:18 PM ET

By Philipp Gollner

SAN FRANCISCO, March 21 (Reuters) - Microsoft Corp.'s decision to delay the release of its consumer Vista operating system is expected to hurt computer makers including Dell Inc. (DELL.O: Quote, Profile, Research) that had hoped Vista would rev up sales late this year.

Shares of top PC maker Dell (DELL.O: Quote, Profile, Research) and No. 2 Hewlett-Packard Co. (HPQ.N: Quote, Profile, Research) fell about 2 percent after Microsoft announced the delay, while Microsoft's archrival Apple Computer Inc. (AAPL.O: Quote, Profile, Research), which has its own computer operating system, added 1 percent.

Microsoft (MSFT.O: Quote, Profile, Research) of Redmond, Washington, the world's biggest software maker, said after the close of regular trade on Tuesday that it planned to delay the consumer launch of its much-anticipated Vista operating system to January 2007 from its earlier target of the second half of 2006. Microsoft plans to launch a corporate version in November.

Now, consumers are likely to wait until the new operating system is available before buying new computers, said Shaw Wu, an analyst at American Technology Research Inc. in San Francisco who has a "buy" rating on Dell stock and a "hold" on HP.

"It makes the second half more difficult now" for PC makers, Wu said. "There's less of a driver for sales."

Round Rock, Texas-based Dell, which disappointed investors last year with slower-than-forecast growth, has said it expected Vista to help boost its sales toward the end of this year.