Windows 95 jump-started the market for PCs, peripherals, and software by delivering big improvements in performance, hardware support, and usability. Now, with computers in nearly 60% of U.S. homes, worldwide PC sales growing at less than 10% annually, and business users still upgrading to last year's Windows 2000 release, the PC industry and those that profit from healthy computer sales could use another live wire to spark interest.

Both office and home versions of XP are based on the Windows NT kernel, making XP more stable than the DOS-hobbled Windows 95, 98, and ME. The software adds remote-control and wireless-networking capabilities for business users. Microsoft hasn't made prices public yet. Speaking during a conference call Wednesday, Microsoft group VP Jim Allchin declined to disclose the Windows XP marketing budget, but said it's in the "hundreds of millions" of dollars. It will be double the company's Windows 95 expenditure during XP's first four months of availability alone, he says.

Industry watchers say XP could be in PC makers' hands much earlier than October. A second, and according to Allchin, final XP beta was shipped in late March. He says at least one "release candidate," the company's term for prerelease software that's close to the final code, is planned. That means Microsoft has likely locked down XP's features, reserving the near-final release for bug clean up.

Allchin advised business users already upgrading to Windows 2000 to stay that course. As with any new PC operating system, users will likely get the best results by purchasing Windows XP on new machines. Microsoft is also concentrating on making sure customers who've bought systems within the last 16 months can make relatively smooth upgrades to hardware they already own.

The launch of Windows XP should be a boon to retailers, who are hankering for a new product to lure buyers after Microsoft's purposely quiet Windows ME upgrade last September. XP's late-October launch means Microsoft and PC makers will miss lucrative back-to-school sales, but they would be ready for the holidays. Microsoft also plans to launch Xbox, its new console game, around the same time.