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Windows Me release spells 98's demise

Computer manufacturers have already stopped bundling the older operating system on PCs in favor of Windows Me, which means retail sales of Windows 98 should dry up quickly.

In the not-too-distant future, Microsoft is likely to issue a press release stating that Windows Me is one of the fastest-selling programs of all time. And there's a good reason for that: Windows 98 already is effectively toast.

Although Microsoft will officially continue to sell Windows 98, the 2-year-old operating system is already in the grip of a quick death. Computer manufacturers have stopped bundling the older operating system on computers in favor of Windows Me, and history shows that this means retail sales of the software will dry up quickly.

Windows Me will sell well, but partly because consumers won't be able to avoid it.

"On many of the desktops and the large majority of notebooks, people don't have a choice," said Matt Sargent, an analyst at ARS. "The majority will come with Windows Me."

More than 90 percent of consumer computers sold in the United States come loaded with a Microsoft OS.

The overnight conversion from one OS to another is largely due to circumstances that exist in the consumer computer market. For one, Windows 98 costs the same as Windows Me. Microsoft's recommended retail prices for both products is identical.

Online retailer CDW, in fact, is charging $7 more for Windows 98 than for Windows Me. And if someone has Windows 95, it will cost $10 less to upgrade to Windows Me than to Windows 98.

Consumers, of course, also want the latest products, said Stephen Baker, an analyst at PC Data.

"Typically, for consumer systems, you don't have a choice. And typically, with consumers, (the new version) is what they want," he said.

People inside Microsoft agreed. "Consumers want the latest and greatest," said Noury Bernard-Hasan, Microsoft's group product manager for Windows. The company will continue to sell Windows 98, he said, but added, "We expect Windows Me will take off pretty quickly."

Spokesmen at both Gateway and Hewlett-Packard said their companies have already stopped shipping consumer PCs with Windows 98.

"Once we started shipping Windows Me, we stopped with Windows 98," said a spokesman at Gateway, which made the switch in mid-August. When Windows 98 first came out, Windows 95 was offered as an option. "But the demand was almost nil," he said.

An HP spokesman said his company has pulled a "hard stop" with respect to Windows 98.

A similar phenomenon occurred when Windows 98 debuted June 25, 1998. On that day, computer makers stopped bundling Windows 95 on their consumer computers. Four weeks later, Microsoft announced that 1 million copies of the new OS had shipped. By September, Microsoft stated that 1.5 million versions of Windows 98 had found their way to consumers.

By contrast, operating systems lead longer lives in the corporate market because of compatibility issues. Typically, IT managers want to work with the same OS over a long period of time. Windows 95 can still be ordered on corporate computers from Compaq Computer, among other major manufacturers.

Although the operating system will be pervasive, analysts largely remain lukewarm toward Windows Me.

"There's nothing in it that says, 'I have to have this,'" said Neil McDonald, an analyst with Gartner. Still, he acknowledged, in the consumer market, Windows Me will "become the de facto operating system through attrition."