While Windows 98 may not spur millions of consumers to rush out and buy new computers, some PC makers are finding signs of encouragement as the upgraded product launches.
The new Microsoft operating system (OS), which integrates greater Web functionality and a browser, is turning out to be a hidden bonus for PC makers looking to gain more control--or squeeze more money--out of the desktop. Vendors such as Gateway and IBM are leveraging Windows 98 to promote their own Internet connectivity services.
Packard Bell, meanwhile, is filling in the border between the monitor edges and the OS interface with its own content, while corporate brother NEC Computer Systems will offer Netscape Navigator on a CD-ROM with its laptops as a way to differentiate itself from competitors.
Whether these improvizations are the result of the structure of Windows 98 or Microsoft's ongoing problems with the Department of Justice is a subject of debate. What is certain is that the desktop will change.
Microsoft labels Windows 98 a consumer upgrade, and a relatively modest one at that. The OS features support for newbie-friendly features like Universal Serial Bus, which enables easier peripheral connections, TV tuner cards, and integrated Internet access. Internet Explorer is worked right into the OS, allegedly for customer convenience.
The consumer spin, and the limited changes the new OS brings to the table, has tempered the potential for sales. International Data Corporation has predicted that only a quarter of medium to large businesses will even upgrade to Windows 98, opting to wait for the next version of Windows NT, Microsoft's corporate operating system. Consumers will therefore make up the majority of Windows 98 customers. (Windows 98 will in fact be superseded in two to three years with a consumer version of Windows NT.)
"We're looking at the launch for a mild stimulant for the PC market for the remainder of the year, but not necessarily a spike," said Kevin Hause, IDC analyst.
What PC makers can get excited about, analysts say, is the desktop flexibility Microsoft has been forced to hand back to vendors. Part of this comes from the increased integration of Web functions into PC technology, but it's also attributable, say some, to increased public and government scrutiny into the company's business practices.
Microsoft has repeatedly emphasized in its public and legal statements that PC makers have always been able to offer customers both Internet Explorer (IE) and Netscape Navigator. PC makers have come to take Microsoft at its word.
In May, Gateway confirmed that it would direct its customers to its gateway.net Internet service, where customers of the direct seller's ISP will be given a choice between IE and Navigator. Gateway declined to comment on whether the pressure of the antitrust suits forced Microsoft's hand, but several Gateway executives were quoted in Justice Department depositions criticizing Microsoft's allegedly restrictive OEM [original equipment manufacturer] agreements.