The Software Savior?

A battered industry hopes Microsoft's new XP operating system will revive it. That's a tall order

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And that may make the features too understated to win over the 63% of U.S. households that already have computers and need a compelling reason to trade up. "Regardless of how much money Microsoft spends to market it, this isn't a paradigm shift," says Bruce Kasrel, an analyst at Forrester Research, "and that's what it takes to get a really big boost in PC sales."

Yet some analysts say there is a real paradigm shift on the horizon: broadband Internet access, with which XP is very compatible. As consumers switch over to high-speed access over the next few years, they will start buying high-powered computers, digital cameras and music devices to take advantage of fast delivery of news and entertainment (for example, streaming news coverage of the war against terror, for those whose PCs aren't near a TV wired to cable).

The $200 million Microsoft is spending worldwide on TV, print and online advertising, along with hundreds of millions more in cooperative ads with partners like Intel, should produce at least a sales boomlet. It isn't likely to reverse the tech slump, but in these dark days, it could provide what Microsoft's marketing campaign promises: a ray of light.

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