| LAS VEGAS
LAS VEGAS Microsoft Corp (MSFT.O) plans to let consumers test the next generation of its computer operating system, Windows 7, starting on Friday and said the new software is "absolutely on track."
Wall Street has identified the timely launch of retail sales of Windows 7 as one of the critical challenges for Microsoft this year, after Windows Vista debuted 12 to 15 months late in January 2007.
Windows 7 is "absolutely on track," Robbie Bach, president of entertainment & devices at Microsoft, told Reuters in an interview at the Consumer Electronics Show in Las Vegas on Wednesday.
He declined to give a specific release date beyond the beta testing on January 9, though he reiterated Microsoft's pledge to deliver Windows 7 around three years after Vista.
According to Collins Stewart analyst Sandeep Aggarwal, the market expects Windows 7 to debut in November 2009. "However, Vista was (late) and it did cost Microsoft dearly in terms of loss of many senior executives, pressure from partners, and increasing competition," he said in a research note this week.
Microsoft, the world's biggest maker of software, has said Windows 7 will incorporate touch screen technology and allow users to more easily personalize the system. It promised more user-friendly features, such as a new taskbar that previews all open windows from a single application by hovering over the program's icon. Another new feature, "Jump Lists," provides updated lists of recently worked-on documents or oft-visited websites without first having to open Microsoft Word or an Internet browser.
At CES, Microsoft also announced a series of new deals designed to show its ability to ride out the economic crisis that has hurt spending on personal computers. Shares of Microsoft fell 6 percent on Wednesday after chip giant Intel Corp (INTC.O) alarmed tech investors by issuing yet another revenue warning.
Bach said he expects Microsoft to emerge from the economy's troubles "a much stronger company."
"The economy is going through a reset," Bach said. "In the short term, that means that every business is having some impact. We are going to manage through that and come out the other end of that reset a much stronger company with a great product lineup."
Microsoft Chief Executive Steve Ballmer is expected later on Wednesday to give details of the company's deal to provide mobile Internet search services to Verizon Communications Inc (VZ.N), a contract that it won over rivals Google Inc (GOOG.O) and Yahoo Inc (YHOO.O).
Bach also said Dell Inc DELL.O had agreed to put Windows Live -- an online hub for personal services ranging from e-mail, instant messaging, and photos to Web applications and links to social networking site such as Facebook and LinkedIn -- on all new Dell computers.
Microsoft will also introduce a new "Halo Wars" video game for the XBox console in March, and an online game show channel on XBox Live, Bach said.
"You are going to see us continue to invest in technologies," he said. Microsoft has "tremendous optimism about where the market is going and what the opportunities are over the next five years."
(To see blog posts from the Consumer Electronics Show, please visit MediaFile at blogs.reuters.com/mediafile. For other CES stories, see here)
(Reporting by Franklin Paul, editing by Tiffany Wu, Richard Chang)