Update: Windows Vista release pushed back to January 2007

The broad availability of the Windows Vista client OS has been pushed back to next year, Microsoft Co-President of the Platform and Services Division Jim Allchin announced Tuesday.

Microsoft, however, plans to release Vista to business partners through its volume licensing program in November 2006, he said in a conference call. This will enable them to begin the deployment process of the OS throughout their business.

In an interview in January, Allchin said he would delay releasing Vista if the OS did not reach a standard of quality with which he was comfortable. In a conference call Tuesday, he said that Microsoft wanted to give customers a firm date for when the company could deliver Vista broadly, and so decided to push back the release to January of next year.

Microsoft still plans to release to manufacturing all of Vista's core editions, of which there are six, at the same time in November, Allchin said. But PCs with the consumer versions pre-installed will not be for sale until January.

The consumer editions of Vista, which Allchin said have not changed, are Windows Vista Starter, Windows Vista Home Basic, Windows Vista Home Premium and Windows Vista Ultimate. The business editions are Windows Vista Business and Windows Vista Enterprise, and they will be available through volume licensing in November.

Allchin would not give specific reasons for Vista's delay, but said it is a quality issue and that it was something partners requested. He said they wanted Microsoft to provide them with a clear date for release because it did not seem Microsoft would have the OS ready in time for them to ship it on hardware by late November. That is when the busy Christmas holiday buying season in the U.S. begins, and Microsoft had originally targeted that time for the release of Vista PCs.

"We’re just trying to be responsive to their concerns and also be forthright about where we are in terms of being a few weeks late for quality," Allchin said.

Microsoft said it is not concerned about rival Apple Computer capitalizing on Vista's delay because the company thinks customers will still buy Vista simply because of the rich features it will provide.

But at least one analyst suggested Microsoft should be worried, since the delay will have a major affect on Microsoft's entire partner ecosystem.

"They will miss out on the lucrative holiday season and this move will definitely slow down growth in the PC industry," said Sam Bhavnani, a principal analyst with Current Analysis, via e-mail. "The impact is far reaching and will have a significant impact on computer manufacturers, resellers and ingredient players."

Wall Street reacted negatively to the news, as both Microsoft and hardware partners Dell and Hewlett-Packard shares slipped in after-hours trading Tuesday. At press time, Microsoft shares were down $0.64 from $27.74 at market close to $27.10. Dell's stock slipped $0.42 from $30.27 to $29.85, while HP's stock slipped $0.54 from $33.54 to $33.00.

Financial analysts noted Tuesday that the news will force hardware partners that were expecting a holiday surge from Vista PC sales to revise their financial expectations.

Microsoft is on target to release another Community Technology Preview (CTP) of Vista by the end of June, a completion of the Beta 2 process of the OS, Allchin said. At this point, Vista is already feature-complete and any tweaks made to the OS before its final release will be for quality, he said.

"It’s not new work that we’re adding," Allchin said. "It's simply ... [work in] continuing to make this the most safe and secure system that’s ever been."

Microsoft said that Vista's delay does not affect the release of Internet Explorer 7 for Windows XP in the second half of the year. IE 7 will ship as a feature of Vista, and Microsoft had said the version of IE 7 for XP was to be released at the same time as the OS.