Microsoft Windows XP Unveiled Amid Media Blitz

It was officially a launch party for the latest version of Microsoft's flagship Windows operating system, but Thursday's Times Square extravaganza was also intended to boost the profile of the much-criticized software giant — and of New York City.

"New York City has emerged from this stronger," ubiquitous New York Mayor Rudolph Giuliani said to an auditorium of hundreds at the Marriott Marquis in Midtown Manhattan.

Giuliani then turned to Microsoft chairman Bill Gates and thanked the world's richest man for holding the launch in his city.

"It shows a tremendous amount of confidence in the spirit of New York City, and shows the exact spirit that America has, the spirit of confidence in our system," Giuliani said.

The entire computer industry hopes the public will show the same confidence in Microsoft Windows XP. It's a crucial launch not just for the software behemoth, but for the whole embattled PC industry, which is suffering through a severe drop in hardware sales.

That was the unspoken subtext underneath the cheerleading by Giuliani, former New York mayor Ed Koch and television personality Regis Philbin for the new operating system, to which Microsoft has attached a $250 million marketing campaign.

"This is the end of an era, that era being the MS-DOS era," Gates said, his hands clasped in front his chest in his trademark mannerism.

Now essentially obsolete, MS-DOS was the company's first operating system.

Windows XP's importance to the PC industry was evident in a panel discussion for the press, held just before the official launch. Gates shared the stage with CEOs from major PC manufacturers such as Gateway, Dell, Hewlett Packard and Toshiba, chipmaker Intel and computer retailers like Staples.

Despite their rivalries and differing perspectives, they were unified in extolling a faster, more powerful and easier-to-use Windows.

"People can get the most out of the technology," Gateway CEO Ted Waitt raved. "It's a great time to buy technology right now."

Staples CEO Tom Stemberg illustrated the benefits the assorted group hoped the new Microsoft product, with a variety of options from digital photography to voice recognition, would have for each of them.

"People will install Windows XP, they'll print the photos out on (HP CEO) Carly (Fiornia)'s printers and I'll sell the paper, and we'll all be happy," he said.

Of course, the competitive natures of the sibling computer companies showed through even as they rallied around Gates.

"I'll speak for the companies actually increasing sales," Dell CEO Michael Dell said with a grin, getting stony stares and pained winces from his opposite numbers at rival companies.

Dell has enjoyed relatively healthy sales numbers, outpacing all other computer manufacturers.

The widely anticipated operating system has been pre-installed on new personal computers for many weeks and is available as a separate product in shops as of Thursday. It sells for $199 for the full version and $99 for the upgrade.

Windows XP's key idea is connecting users to other computers and to each other. It includes better Internet tools and features including built-in wireless networking support, and has also been touted as practically crash-proof, with Microsoft officials claiming it is 30 times as reliable as Windows 2000.

Microsoft used its $36.2 billion cash pile to throw launch parties around the globe, schmoozing thousands of customers and business partners and making sure its biggest names hit the streets plugging the product. 

Microsoft's Chief Executive Steve Ballmer spearheaded an event in London, while Gates hosted the biggest corporate bash in New York since the Sept. 11 attacks on the United States.

The launched was accompanied by a choir of gospel singers in gold-lined white robes singing "America the Beautiful" and New York native Philbin quizzing Gates on XP features on a mock Who Wants to Be a Millionaire set.

Microsoft also briefly addressed fears of some groups who worried that the new operating system would compromise security on the Internet. Windows Groups Vice President Jim Allchin claimed Windows XP provided "instant protection" from hackers, was designed with help from anti-virus vendors, had weak points culled from its source code and remained uncompromised even though it had been on the Web for weeks.

Outside Microsoft's halls, however, skepticism is likely to remain. A key feature of Windows XP, the Passport, allows users to automatically transfer personal and financial information about themselves to Web sites. This, consumer groups argue, could lead to serious privacy breaches. Groups such as the Electronic Privacy Information Center are asking regulators to require the system to allow more consumer opt-in procedures for sharing of personal data.

Industry analysts agreed that XP is a crucial product not only for Microsoft but for the whole PC industry, which is going through a record slump in sales.

"Microsoft isn't the only one counting on Windows XP for a burst in revenue," said Michael Silver, from research group Gartner, in his analysis of XP. "Original equipment manufacturers, hardware vendors and Intel hope that Windows XP will drive people to the stores to buy new PCs."

Comparisons with the launch of Windows 95 six years ago will inevitably be made, although no expert believes the new operating system will generate a comparable level of excitement. Microsoft is insisting that Windows XP will build its customer base over months and years rather than weeks as in releases past.

A number of analysts remained skeptical of XP's ability to save the industry. The chief analyst at the research firm Gartner warned that XP would not change the underlying weaknesses that have caused PC sales to be poor for a year now.

"Gartner doesn't believe that many enterprises will upgrade Windows 2000 clients to Windows XP. We recommend against it," the firm wrote in a recent report.

Even if sales of Windows XP are brisk, the company still has plenty of other worries, including its own prediction that PC sales will be flat, or perhaps even decrease by 2 percent, over the company's fiscal year ending in June.'s Michael Park, Reuters and The Associated Press contributed to this report.