Xbox: late or not?

Microsoft's video game system, Xbox, may come up against a manufacturing delay, although the software giant denied reports of a glitch in the motherboard and said it is still on track for a November launch in the US.

Eric Ross and David Readerman, both analysts at investment banking firm Thomas Weisel Partners, have issued a report saying production delay is unlikely to affect the 8 November shipping date.

The investment firm reported Microsoft management is holding fast to the company's plans to stock about 600,000 to 800,000 units at launch time.

Microsoft said that no problems with the motherboard exist and the device is still on track, with an expected 4.5 million to 6 million units to ship through 30 June 2002.

"There's absolutely no problem with the design of Intel's motherboard," Microsoft said in a statement. "We're still on track for an 8 November launch."

The Xbox will arrive in stores three days after Nintendo starts selling its new GameCube console.

Microsoft has said it will spend about $500m to market the console. Intel designed the Xbox motherboard and Flextronics is building it.

Rob Enderle, an analyst at Giga Information Group, said any delay would cause the product to slip and seriously damage fourth-quarter sales for the offering, as there would not be enough inventory.

"This would represent the approach of a worst case scenario, where the Xbox took sales from Windows XP Home Edition but, because of the delay, shifted demand to the Nintendo Cube. Could be really ugly," Enderle said.

"I did mention earlier that this was one of the most risky products that Microsoft had ever developed."