Microsoft has delayed the consumer launch of its much-anticipated Windows Vista until 2007, sending its shares down nearly 3 per cent.
The world's largest software maker pushed back the consumer version of Vista until January 2007 from an earlier target for the second half of 2006 and pledged to ship the next version of its operating system to business customers in November.
Vista is the first major overhaul of Windows since Microsoft rolled out Windows XP nearly five years ago. Microsoft had originally been expected to release Windows Longhorn, now Vista, in 2005.
The company scaled back its ambitions and pushed it out to 2006 before this latest delay.
The delay may reverberate throughout the technology industry from PC manufacturers to chip makers and down the supply chain, analysts and investors said.
"It is a critical eight to 10 weeks for retailing and for the producers. The retailers and PC hardware manufacturers work on razor-thin margins, so the impact there could be pretty severe," said David Smith, analyst at Gartner.
Microsoft said it delayed the launch to improve overall quality, particularly in security, and that PC makers didn't want the operating system introduced in the middle of the christmas sales season, because a new version would create instability in the market.
In addition to beefed-up security, the new Windows offers a new interface with 3-D scrolling between different windows, which can appear translucent to allow users to see the information beneath. It can also display and record high-definition television on the computer and allows the user to search for content within the PC and across the network.
Microsoft plans to conduct a consumer "beta", or test, of Windows Vista for two million users in the coming quarter.