Microsoft is extending the time it will allow OEMs and retail outlets to sell PCs with Windows XP. The company has been forced to act, due to customers' continued reluctance to upgrade to Vista.

The company had originally planned to stop selling XP through OEMs and retailers on 31 January next year, while custom system builders have until 31 January the following year , to pre-install XP on machines. But because sales of Vista PCs have not been as strong as expected, OEMs and retailers have asked Microsoft to extend XP's availability. OEMs and retailers will now have until 30 June 2008, to sell PCs with Vista preinstalled on machines, Microsoft said. Retailers also can sell XP out of the box until that time if they choose, the company said.

"While we’ve been pleased with the positive response we’ve seen and heard from customers using Windows Vista, there are some customers who need a little more time to make the switch to Windows Vista," Microsoft said.

Microsoft also is extending the life of Windows XP Starter Edition, the version of XP for emerging markets. The software will be available until 30 June 30 2010, so users in those markets can take advantage of low-cost, hardware-constrained PCs that Vista may not be compatible with. Vista requires hardware upgrades that most PCs running XP do not have.

Per Microsoft's policy as of 2002, a new Windows OS would stay on the market about four years after its original availability date. But XP was released on Oct. 25, 2001, more than five years before Vista limped out the door to consumers Jan. 31, 2007, after several delays and a major code overhaul.

Microsoft had high expectations for customer adoption of Vista, and claimed the launch would be one of the most successful in Windows history. Unfortunately for the company, those predictions so far haven't panned out, and in July, Microsoft lowered its projections for customer adoption of Vista. The company had said the split between XP and Vista sales in its fiscal year ending June 30, 2008, would be 15 percent to 85 percent; now the company is saying the split will be 22 percent XP and 78 percent Vista.

Vista Service Pack 1 (SP1), a rollup of updates for the OS that Microsoft has said will be available in the first quarter of 2008, should make Vista more market-worthy. In fact, many consumers and businesses have said they would wait for the update before moving from XP to Vista.