Dell and HP still the life of the XP party

Facing a 30 June deadline to stop selling PCs with Windows XP, the world's largest computer makers are getting creative, with Dell and HP's Australian offices staying cagey about their intentions.

Taking advantage of the "downgrade rights" offered as part of the Windows Vista licensing agreement, HP and Dell both plan to offer machines loaded with XP well beyond June.

Technically, the computers will be Vista Business or Vista Ultimate machines that have been factory downgraded to XP at the customer's request. In practice, they are more like XP machines that come with an already paid-for upgrade to Vista when and if the customer chooses to do so.

HP said it plans to continue selling the "pre-downgraded" desktops, notebooks, and workstations to its business customers until 30 June, 2009. Dell is already pitching the same option on its Web site and promising the models will stick around long after it stops taking standard XP orders on 18 June. Other computer makers told ZDNet.com.au's sister site CNET News.com they are still exploring what to do but also want to sell XP beyond 30 June.

A spokesperson for HP Australia told ZDNet.com.au today that the company is "in the same position as the US in terms of what we will be providing locally".

"After 30 June we'll be issuing our machines with a Vista licence but users can choose to downgrade if they wish," said the spokesperson, adding that the company will offer machines with XP installed until early 2009, giving users the option to upgrade to Vista.

Similarly, Dell Australia will be offering some machines with XP installations or Vista downgrade rights for an undetermined period, according to a spokesperson for the manufacturer.

"Downgrade rights allow customers to acquire the most recent version of Microsoft software but continue to run a previous version until ready to upgrade. Windows Vista Downgrade rights are now being offered in OEM versions for select Windows Vista editions," said Dell's Australian spokesperson.

"We stay in close touch with Microsoft regarding the dates bounding this program and currently expect to offer the downgrade rights program for as long as Microsoft supports it," said the spokesperson.

A spokesperson for HP Australia also expressed the manufacturer's intention to support XP machines as long as it remains permissible with Microsoft and meets user demand, saying the company "will continue to watch market conditions".

Only the Business and Ultimate variants of Vista come with downgrade rights, meaning most consumer machines can't be sold in a similar fashion. However, Dell Australia confirmed that it would offer XP on its Vostro and Dell XPS systems for a "small fee".

While companies can offer pre-downgraded machines via their Web site, things get a little more complicated when it comes to buying a PC at retail stores. It may be possible for customers to buy such a machine, but just how this will work — and if stores will offer such an option — is not totally clear. The tricky issue is that, to stay within Microsoft's terms, the customer has to somehow "request" the XP downgrade.

Kevin Kutz, a director in Microsoft's Windows unit, said that the downgrade rights option meets customer needs.

"While [computer makers] continue to see large numbers of customers making the transition to Windows Vista, there are some pockets — like small business — that need a little more time," Kutz said in a statement. "And from what we've heard from our partners, the downgrade rights option fulfils that need."

The pre-downgraded PC option is just the latest way that PC makers have responded to stronger-than-expected demand; after shifting largely to Vista with its January 2007 mainstream launch, Dell and others quickly began adding more XP options in response to customer requests.

For some time now, computer makers have been selling machines with an XP recovery disc as a downgrade option.

As for whether a broader reprieve might yet come for XP, Microsoft CEO Steve Ballmer has left the door open a crack.

"XP will hit an end-of-life," Ballmer said in Belgium recently, according to Reuters. "We have announced one. If customer feedback varies, we can always wake up smarter, but right now, we have a plan for end-of-life for new XP shipments."

CNET News.com's Erica Ogg and ZDNet.com.au's Marcus Browne contributed to this report.