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Will Software Drive Hardware?

Hewlett-Packard CEO Carly Fiorina said she is counting on Windows XP to drive sales of the company's Pavilion PCs as well as related peripherals such as its printers, digital cameras, and Jornada line of handheld computers.

HP said it will be releasing a wireless home networking product taking advantage of Windows XP's added network support. Compaq is boosting its support options with Windows XP System Restore capacity. Sony said audio and video runs much more reliably on its XP systems.

"Windows XP is robust and reliable," said Chris Pollitt, director of Sony's PC product marketing. "Our peripherals are instantly recognized when they plug into a PC. Now users can feel more comfortable doing more."

Others are not so sanguine. According to a report by Gartner Dataquest, Microsoft's latest OS should stir up consumer interest this holiday season. But sales are likely to fall well short of the tech sector's pre-September 11 expectations.

"People aren't going to buy new PCs if they feel uneasy about their jobs and are preoccupied with events going on around the world," Steve Kleynhans, analyst with Meta Group.

What About Windows 2000?

The OS may also be less than attractive to people who migrated to Windows 2000 in the last year. XP is built on the same basic technology as Windows 2000, which was aimed at professional users. XP has both home and professional versions.

Businesses that already run NT Workstation or Windows 2000 Professional already have XP's chief benefit: stability, said Steve Kleynhans, analyst with Meta Group. Other features touted with Win XP such as digital photo editing, a personal firewall, and better support for MP3 audio are great for consumers, but aren't of much value to corporations, he said.

Bob McDowell, the Microsoft vice president who hosted the Seattle launch event, acknowledges that Windows 2000 users aren't likely to upgrade immediately.

"If you're standardized on a [Windows] 2000 environment, would I push to move to XP now? Probably not," McDowell said. "But if you're in a mixed environment, with 95, 98, 2000, and even others, making the move to XP should be a no-brainer." Microsoft will continue to support those other operating systems, he stressed; but he cites the new release as "the most compelling reason to standardize."

Enthusiasts a Key

The wild card in Microsoft's marketing model are technology enthusiasts. While a comparatively small group, enthusiasts tend to be highly vocal in both their praise and condemnation. Their word-of-mouth reviews of this OS, like others before it, will also be a factor in the success or failure of Windows XP.

Enthusiasts were the reason CompUSA opened 225 stores at midnight Thursday, hoping to recreate the excitement surrounding the launch of Windows 95 six years ago.

In downtown San Francisco, only three dozen people had lined up Wednesday night before the store reopened, far fewer than store staffers had expected. And only a handful of those first customers said they had come to buy Windows XP. The others were drawn by promotions for other products, including free inkjet printers and system RAM for a limited number of customers, which CompUSA offered in ads for its "Midnight Madness" event.

Once the store opened, however, every third or fourth person on line at the cash register had a copy of Windows XP in their shopping basket. Some, like Internet security specialist Harris Schwartz, 34, had no specific reason for upgrading aside from simply wanting to keep abreast of Microsoft's latest OS. "I've just heard some good things about it," Schwartz said.

"I like to keep up with the latest technology," said Kevin Stevens, 27, adding that he felt especially motivated to familiarize himself with Windows XP because he is studying to be a Microsoft certified engineer.

A few customers appeared to have boned up on XP well in advance. Bernard Kruger, 49, said he'd been preparing to upgrade his home office for some time, checking to make sure that all his equipment was compatible with the new OS. Kruger, who had bypassed Windows Millennium Edition and Windows 2000, cited XP's much touted stability as a main reason for upgrading. He was also impressed by XP's strict new oversight on device drivers, so that attempts to install noncertified drivers will elicit warnings of possible problems.

"I love standards, and I hate clashing drivers. I'm glad to see Microsoft moving in a direction where drivers are forced to comply," Kruger said.