Dell Brings Back Windows XP

Dell(DELL Quote - Cramer on DELL - Stock Picks) will bring Windows XP back to run on some of its consumer PCs, raising further questions about the impact Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) new Vista operating system is having on PC sales.

Three months after converting its entire line of consumer PCs to Vista, Dell will make the older operating system available in response to customer demand.

Dell is not the first PC maker to hedge its bets by continuing to sell PCs with Windows XP, as TheStreet.com reported earlier this year.

But the move by Dell, the world's No. 2 PC maker, underscores the extent to which Microsoft's Vista has failed to live up to the grand expectations some companies had for it.

PC makers had initially hoped that Vista would entice consumers to buy new PCs, leading to a major upgrade cycle. Nearly three months after Vista's release however, signs are emerging that Vista's effect on PC sales will be moderate, at best.

On Wednesday, industry research firm Gartner said that Vista's impact on PC sales was limited to mature regions like the U.S., where it boosted first-quarter shipments up 2.6% year over year.

While Vista provides a snazzy new user interface, many consumers see no major reason to rush out and buy a new PC with Vista, as opposed to waiting until they need to buy a new PC. What's more, reports of bugs and hardware incompatibility with Vista have caused some consumers to be leery of upgrading.

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