Microsoft Delays New Windows Release

Microsoft Corp. will delay the consumer release of its new Windows operating system until January 2007, missing the holiday sales season and throwing some PC makers and retailers into turmoil.

The delay in Windows Vista — caused by Microsoft needing more time to enhance security and other functions — will come as a blow to Microsoft partners who were looking forward to a new operating system to boost holiday sales.

Windows Vista is Microsoft's first major update to the company's flagship operating system since Windows XP was released in late 2001.

"It's not the optimal situation, to be launching the next-generation version of Windows right after the big holiday sales season," said analyst Joe Wilcox with Jupiter Research.

The company will release some versions of the new operating system for big businesses by November as planned, but the consumer version will be postponed until January, said Jim Allchin, co-president of the Microsoft division that includes Windows.

He said the decision to delay the release came after Microsoft realized that Vista would be completed several weeks later than originally planned, largely because of efforts to improve security in the new system.

That delay was enough for some retailers, computer makers and other corporate partners to say they would have trouble preparing for the holiday season.

"The fact is that we wanted everybody in the industry to be ready for this," Allchin told journalists and analysts in a conference call.