Microsoft launches Windows 7, eyes PC sales rebound

By Bill Rigby

NEW YORK (Reuters) - Microsoft Corp launched Windows 7 on Thursday, its most important release in more than a decade, aiming to win back customers disappointed by Vista and strengthen its grip on the PC market.

The world's largest software company, which powers more than 90 percent of personal computers, has received good reviews for the new operating system, which it hopes will grab back the impetus in new technology from rivals Apple Inc and Google Inc.

"They met expectations but that was pretty much it," said Michael Gartenberg, a long-time Microsoft analyst at market research firm Interpret after a launch event in New York. "They showed off some very cool things, but now they have to keep the momentum going."

The new system -- which is faster, less cluttered and has new touch-screen features -- comes almost three years after the launch of Vista, whose complexity frustrated many home users and turned off business customers.

The success of Windows -- which accounts for more than half of Microsoft's profit -- is crucial for Chief Executive Steve Ballmer to revive the company's image as the world's most important software company.

"Windows 7 is a chance for us to let the PC be not only more interesting but just simpler and faster for the many, many hundreds of millions of people who use them," Ballmer told Reuters Television in an interview on Thursday.

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Ballmer and other executives demonstrated at the event a range of new devices showing off Windows 7, from ultra-slim laptops to large touch-screen computers, highlighting a new Kindle book-reading application from Amazon.com Inc and live-streaming CBS television shows.

Crowds lined up overnight to see the new software and check out the latest PCs at the first branded Microsoft store, which opened on Thursday in Scottsdale, Arizona.

Microsoft is charging $199.99 for the Home Premium version of Windows 7, or $119.99 for users seeking to upgrade from older versions of the operating system -- well below comparable prices for Vista.

It also has a range of offers in conjunction with retailer Best Buy Co Inc and PC makers such as Dell Inc and Acer Inc.

The U.S. holiday season will soon reveal whether consumer PC sales get a kick from Windows 7, but success with corporations -- the key to Microsoft's financial power -- will not be clear until next year, analysts say.

Windows 7 sales will not immediately impact the bottom line of Microsoft, which is expected to post a lower quarterly profit on Friday.

The company's shares closed up 1 cent at $26.59 on Nasdaq. They are up 79 percent since early March. (For a graphic showing major Windows releases and Microsoft's share price, click here)

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