Hardware News

Xbox may see manufacturing delay

Sandeep Junnarkar CNet

Published: 15 Aug 2001 08:30 BST

A flaw in Intel's motherboard for Microsoft's Xbox may delay the manufacturing date for the much anticipated game console by up to four weeks, according to analysts.

Several sources across the Xbox manufacturing supply chain confirmed the manufacturing delay, according to Eric Ross and David Readerman, both analysts at investment banking firm Thomas Weisel Partners.

The production delay, however, is unlikely to affect the device's 8 November US launch date because of the option of cranking up the current slack production schedule, the analysts wrote in a report on Tuesday morning.

Officials at Microsoft and Intel were not immediately available for comment.

But the investment firm said that Microsoft's management is holding fast to the company's plans to stock about 600,000 to 800,000 units at launch time and its expectations of selling up to 1.5 million units by the end of the year.

Staying on track for the launch date is vital for Microsoft, which is pegging the sales on the holiday shopping season.

The Xbox is the company's high-profile bid to expand into the lucrative video game market, moving beyond its traditional PC base as sales of desktop and laptop computers continue to slacken. The software giant has said it will devote $500m just for marketing the console, which will compete against market leader Sony's PlayStation2.

Microsoft's Xbox has already been plagued by reports of delays, which the company vehemently denies.

Last year, Sony was forced to push back the launch of its PlayStation 2 in the United States and Europe because of delays in producing the graphic chip that would power the game console. The company originally promised one million units, but component shortages forced Sony to reduce that figure to 500,000.

The Xbox video game console will retail in the US for $299 -- the same price as Sony's PlayStation2.

Shares in Microsoft were down 48 cents, to $65.35, in morning trading.

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