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Economists: No doomsday with Windows delay

It sounded like economic doomsday: an extraordinary warning from top technology companies of far-reaching consequences from any delay in the imminent release of Microsoft's new Windows software.

"The direct effect on the U.S. economy of a delay to Windows 98 would be considerable," said the letter sent Thursday to the Justice Department by 26 high-tech executives from companies ranging from Intel to Compaq.

But several leading economists on Friday disputed the broad claims in the letter, an industry attempt to blunt any move by antitrust officials to block the update to the Microsoft operating system. While the letter hints of the impact on the millions of Americans who work on software that runs on Windows and in related industries, the economists said any major damage is likely to be limited to a handful of high-tech companies.

"To make a claim that the failure to introduce new software, a new operating system on time, is going to affect the economy . . . that's just unbelievable," said Daniel Bachman, a senior economist at WEFA Inc., a Philadelphiaeconomic forecasting firm.

Windows 98, the $109 upgrade to the system software that runs virtually all home computers, is due to be shipped to computermakers within weeks and will hit retail shelves June 25..

Bachman said that the companies likely to suffer within the computer industry could include makers of accessories such as computer game joysticks, since Windows 98 enables users to hook up peripherals more easily.

"Some specific manufacturers who have made aggressive plans for the introduction of Windows 98 could be hurt," Bachman said.

"It is more an issue of damage or harm to individual companies, which is a relevant issue, as opposed to overall damage to the economy," said Lynn Reaser of NationsBank Corp.

Reaser said that more important issues for the computer industry were an ongoing price war that has hurt profits and reduced consumer demand because of the economic slump in Asia.