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New PCs to debut with Windows XP

Will Microsoft?s new OS encourage consumers to buy new PCs? The first indication will come when PC makers start to sell notebooks and desktops loaded with XP.

Will Windows XP encourage consumers to buy new PCs? The first indication will come Monday when PC makers start to sell notebooks and desktops loaded with Microsoft's new operating system.

Hewlett-Packard, Compaq Computer and other PC makers will come out with new and fairly inexpensive Windows XP systems for the consumer market Monday, both in the United States and internationally.

At a minimum, PC manufacturers will bundle Windows XP on existing models. Dell Computer and Gateway, for example, have been taking preorders on existing machines loaded with Windows XP.

Prices for new desktops will start around $750 sans monitors, while Compaq will launch a notebook for $999. Rebates will further cut the actual retail price.

Officially, Windows XP won't debut until Oct. 25, but Microsoft is permitting PC makers to sell computers with the new OS on Monday. Initially, Microsoft instructed PC makers to soft-pedal the prelaunch. But subtlety appears to be falling by the wayside. And roughly 30 days after the Oct. 25 release, Windows XP will become the near-exclusive OS for consumer computers, according to sources in the PC industry.

Whether Windows XP will prompt consumers to buy new PCs has been one of the major debates in the industry this year.

Optimists have pointed out that Windows XP contains a number of new features, including a splashy interface called Luna. In addition, Windows XP takes a lot of the pain out of burning CDs, editing video and managing other multimedia applications.

"If XP--after Microsoft spends a half a billion dollars delivering (its) message--isn't a success, I will be amazed," said Nathan Brookwood, an analyst at Insight 64, adding that he is impressed with a prerelease copy of the OS. "XP is the thing that will create the desire in consumers to get a new computer."

However, others believe that the dour economy, compounded by the recent terrorist attacks in the United States, will put the brakes on discretionary spending. And the new features on Windows XP aren't all that exciting either, according to some analysts.

"People aren't going to go out and buy new PCs for the features in XP. It's just not going to happen," Technology Business Research analyst Brooks Gray said. "There is a large amount of people feeling the impact of the economy right now, myself being one of them. Then you have the saturation of the PC market. The drivers aren't there for people to go out and necessarily purchase a new PC."

History, to some degree, favors the pessimists. Although Windows 95 substantially juiced PC sales, the last three Microsoft operating systems haven't been a factor in jump-starting sales, according to analysts. Consumers and businesses bought Windows 98, Windows Me and Windows 2000, but mostly because they came on PCs they were buying anyway.

Still, an upgrade cycle does lie around the corner, according to various PC executives and analysts. Corporations typically upgrade PCs every three years. The last buying binge occurred between late 1998 and early 1999.

"You've got an installed base that is (at 400MHz), when the state of the art is a gigahertz and above," Paul Otellini, general manager of the Intel Architecture Group, said in August. ?That difference creates such a vacuum that demand is created."

All of the predictions about a 2002 upgrade cycle, however, took place before the attacks on the World Trade Center and the Pentagon.

Still, the fact that the new Windows XP PCs will be cheap could make a difference.

Compaq's new Presario 700 notebook, for instance, will sell for $999 and come with a 1.2GHz Athlon processor. Compaq will also launch new notebooks with Pentium processors.

As for desktops, the company will release the Presario 8000, which will come with either Intel or Advanced Micro Devices processors. The system features a new design and starts at $1,199.

HP's new entry-level Windows XP machine, the $749 Pavilion 7935, comes with a 1.3GHz AMD Athlon, 128MB of SDRAM, a 40GB hard drive, an 8X CD-RW drive and a network connector.

For $200 more, the new Pavilion 7955 packs a 1.5GHz Intel Pentium 4 processor, 256MB of SDRAM, a 40GB hard drive, a 16X DVD drive, a 12X CD-RW drive, a 32MB Nvidia TNT2 M64 graphics card, and front-access ports for USB and IEEE 1394.

The company also is offering a year of free America Online Internet service and a $150 mail-in rebate on certain monitors, which are sold separately.

The new Pavilions generally cost less than nearly equivalent existing models from HP or cost about the same but come with more power under the hood.

On the notebook front, HP initially will offer two new Windows XP models: the Pavilion N5415 and N5425. The N5415 will cost $1,299 with a 900MHz AMD Duron processor, 256MB of SDRAM, a 10GB hard drive and an 8X DVD drive. The N5425 will sell for $1,600 with a 900MHz AMD Athlon, 256MB of SDRAM, a 20GB hard drive, a combo DVD/CD-RW drive and an Ethernet card. HP will offer a $100 mail-in rebate with both models.

Dell is selling Windows XP on existing desktops and notebooks. The Dimension 4300, for example, comes with a Pentium 4, standard memory and Windows XP, starting at $1,165. Dell also will sell Windows XP on its Inspiron 2500 notebook. Standard configurations of the notebook go for $1,899.