Microsoft sets on-sale date for Windows Me

Windows Me, as the third installment of Windows 98 will be called, is targeted at home PC users. The upcoming OS is designed to improve the reliability and ease of use of Windows 98, but the improvements are mainly targeted at digital music, imaging and home-networking technologies that have taken off since the release of Windows 98, Second Edition, last year.

"By focusing principally on the needs of the home user, we were able to create a more simplified PC experience for first-time users while enhancing existing users' experiences by enabling new home computing scenarios," Paul Maritz, vice president of Microsoft's platforms group, said in a statement today.

"Windows Me supports our goal to evolve the Windows-based PC to continue to provide a rich and exciting user experience in the connected home," he said.

Much like it predecessors Windows 98 and Windows 98 Second Edition, Windows Me does not offer many pressing reasons for most users to upgrade. In the past, many of these new features would be offered via a service pack release.

But Windows Me addresses the home market at a time when Microsoft faces more competition than ever for non-business PC users, analysts say. As the PC fades from dominance amid new wireless handheld devices, television set-top boxes, Internet terminals and Web pads, Microsoft must work to retain customers in a market that previously offered much fewer choices.

Evidence is mounting of an exodus away from the PC as the sole computing device in the home. AOL, for example, recently announced it would work with PC maker Gateway to create appliances designed for surfing the Web based on the Linux operating system. Microsoft has hedged its bets by pushing its Windows CE operating system for non-PC devices, going so far as to slash developer's fees by 50 percent last week.

"It will be a much more diverse kind of landscape in coming years," said Dwight Davis, a Microsoft analyst with Summit Strategies. "The PC will still be around and owned by a lot of people, but there will be a much broader range of devices competing for that market."

Windows Me will be released today to PC makers and CD-ROM manufacturers. This means that computers loaded with Windows Me will begin hitting stores in about six weeks. The standalone version, for computers with Windows 95 or no operating system, will be priced at $209. The upgrade for Windows 98 computers will be priced at $109, Microsoft said.

Because the final version of Windows Me was released to testers in the past month, many beta testers expected the OS would be released this summer, although Microsoft never publicly announced a release date.

The release of Windows Me is the latest twist in a somewhat rocky development. Microsoft chairman Bill Gates initially declared that Windows 98 would be the last operating system developed using the Windows 95 code base and that all future operating systems--for both corporate and consumer users--would be based on Windows NT, now known as Windows 2000.

Although Windows 2000 is widely acknowledged as more stable than previous operating systems, that plan was scrapped, and the life of Windows 98 was extended with Windows 98, Second Edition, which was released last summer, and now Windows Me.

The next operating system from the company, code-named Whistler, is based on Windows 2000 and is targeted at both home and business users.

As a placeholder between Windows 98 and Whistler, which is still at least a year from release, Windows Me serves another purpose, Davis noted. "Windows Me translates into a better revenue opportunity than something labeled Windows 98--it sounds pretty dated."

New features of Windows Me include:

• Internet Explorer 5.5;

• Windows Media Player 7;

• System Restore, which restores deleted critical system files;

• Auto Update, which automatically downloads updates from the Windows Update site;

• Home Networking Wizard, designed to simplify adding computers or peripherals to a home network;

• Windows Image Acquisition, designed to simplify the downloading and saving of images from digital cameras;

• and Windows Movie Maker digital video editing software.