Microsoft is extending the time it will allow original equipment manufacturers (OEMs) and retail outlets to sell PCs with Windows XP as customers continue to balk on upgrading to Windows Vista.

Microsoft had planned to stop selling XP through OEMs and retailers on January 31, 2008, while custom system builders have until January 31, 2009, 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 June 30, 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 in a press statement.

Microsoft also is extending the life of Windows XP Starter Edition, the version of XP for emerging markets. The software will be available until 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 January 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 per cent to 85 percent; now the company is saying the split will be 22 per cent XP and 78 per cent Vista.

According to some, that may even be optimistic. Paul Ghysels, a custom system builder, said that Microsoft has "really blown Vista." He said he's not surprised Microsoft extended the availability of XP for OEMs. "I figured Microsoft would have to come up with something because Vista is so unprepared for the market right now," Ghysels said.

He added that the extension likely won't affect his business much, since most of his customers come to him because they are already disillusioned with the major PC manufacturers and thus unlikely to want a name-brand PC pre-loaded with 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.