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Microsoft Corp's Windows NT operating system has posted slower-than-expected sales since being released in Aug 1993, posing an image problem for a company used to instant mega-hits. Microsoft has spent $150 million developing Windows NT, a more powerful version of the wildly popular Microsoft Windows program. Windows NT was designed to get Microsoft onto powerful workstations and mid-range computers. Companies are reluctant, however, to move mission-critical operations to a largely unproven operating system, while many microcomputer users are unwilling to buy a $495 operating system that hogs a lot of memory. Windows NT also faces stiff competition from the various flavors of the Unix operating system. Given Microsoft's muscle, though, many observers believe that Windows NT will become the most popular corporate operating-system by 1996.

Some 170,000 people are attending Comdex Fall 1993, the microcomputer industry's trade show in Las Vegas. The 17 percent jump in attendance from Comdex Fall 1992 symbolizes the rebounding microcomputer industry, which has posted a 15 percent growth rate in 1993. About 2,200 companies are displaying all sorts of new devices, including tiny disk drives, ever-shrinking notebook computers and wireless receivers. Attendees complain that Comdex is simply too huge: with exhibitors taking up 2.2 million square feet at five separate sites, simply selecting a few interesting attractions from the 704-page official guide and finding they can take hours. No gimmick to attract customers is too tacky or abrasive for exhibiting companies. Celebrity pitchmen, comedians, giveaways and yelling actors all seem appropriate to Las Vegas, glitter capital of the world.

AT&T will implement a 'dial for mile' program, which provides frequent-flier miles to long-distance telephone customers. MCI Communications Corp and Sprint Corp already have such programs. MCI has been working with AMR Corp's American Airlines and Wings Holdings Inc's Northwest Airlines since the 1980s, offering five miles for each dollar a customer spends. Sprint announced an agreement with Trans World Airlines in Aug 1993, giving 10 miles for each dollar for the first six months, and then cutting the benefit to five miles. AT&T will formally announce its program early in 1994. UAL Corp's United Airlines and Delta Air Lines are mentioned as possible partners.

AT and T plans to fundamentally change the way it markets long-distance services to residential customers. Beginning Mar 3, 1993, the company's 'i Plan' will customize calling plans for individual customers. A bold move is needed by AT and T, which lost long-distance revenue in 4th qtr 1992. Arch-rivals MCI Communications Corp and Sprint Corp, in contrast, announced strong growth. MCI's 'Friends & Family' and Sprint's 'The Most' promotional programs have hurt AT and T. MCI advertising and communications VP Angela Dunlap scoffs at 'The i Plan,' saying it only applies to users who spend more than $30 in a month. Sprint executive Dave Schmeig says 'The i Plan' is a refurbished version of Sprint's two-year-old 'Priority' program. Still, both firms may be hard pressed to compete with AT and T's considerable marketing muscle.

Borland International Inc says it will stop bundling a free copy of its Quattro Pro DOS-based spreadsheet with its new Quattro Pro for Windows spreadsheet. Borland will also temporarily cut the wholesale price of Quattro Pro for DOS by one-third. Borland rolled out the bundled product, called Win-Dos, in Sep 1992, with the idea that the older-style DOS program would provide a painless introduction to its Windows counterpart. The bundled program sold for about $300. The programs were not available individually. Users did not see clearly the benefit of the bundled product, Borland VP of product marketing David Watkins says. The standalone Windows product will sell for about $300, while the DOS version will now sell for as little as $100.

Eastman Kodak Co has had a difficult time promoting its new Photo CD players, despite spending $30 million in a 4th qtr 1992 advertising campaign. The players, selling for $350 to $650, allow users to view and edit photographs on their TV sets. Customers spend $20 to $25 for putting a 24-exposure roll of conventional film on compact disk. One aim of the product is to bolster weak sales of film. Businesses, museums and other organizations are using Photo CD technology for low-cost graphics-arts work, but Kodak is seeking a breakthrough in the consumer market. Demand remains tepid, with many customers saying the players and the processing cost way too much. Photo CD faces stiff competition from Philips Electronics NV's compact-disk interactive (CD-I) players, which play music and interactive audio-video disks as well as Photo CD disks.

US personal-computer vendors brought their price war to Japan in Oct 1992, but may still have a hard time making inroads against NEC Corp, which holds about one-half of the domestic market. Japanese customers tend to prioritize service and function over price, especially when buying complicated items like computers. The Japanese market is currently fragmented, with at least four major platforms that are not compatible with each other. NEC grabbed market domination by building the broadest distribution system and a vast library of 15,000 software programs. Vendors of IBM compatibles have recently agreed on a standard Japanese-language operating system. Japanese retailers may shy away the low-cost IBM compatibles of Compaq, IBM, DEC and others because of their low profit margins.

Phil Alden Robinson, director of 'Sneakers,' which is a film about computer hackers, uses CompuServe's on-line services to promote his movie. CompuServe members can question Robinson about his movie, which stars Robert Redford, Sidney Poitier and Dan Aykroyd. The movie is scheduled to open on Sep 9, 1992. Universal Pictures considers Robinson's use of CompuServe to be a good marketing strategy because CompuServe provides a way to reach computer users, who are likely to constitute a core audience for the film. Universal is also promoting the film via newspaper ads which include passwords that can be used to play computer games at CompUSA computer stores. Universal is also distributing a computer disk that functions as a sort of a 'press kit.' The disk incorporates the usual elements of a press release about a movie together with animated computer graphics and games.

Eastman Kodak Corp is planning a heavy advertising and promotion campaign to push its Photo CD product. The company hopes that consumers who were brought up with glossy photographs of family and friends will find a need for watching photos on television with the ability to crop and zoom as desired. Users can take photos as they always have, but at the time of development film can be transferred to a disk that can only be played using a Kodak Photo CD player. A roll of 24 pictures will cost $20 to be transferred to a disk. The Photo CD players cost $450 and $550 and also play music compact disks. Kodak hopes to boost sales with the product and hopes to prove it is still the premier photography innovator in the industry.

IBM is shipping 700,000 copies of its OS/2 2.0 operating system and plans a television advertising campaign to promote the product. Meanwhile, IBM has also settled a legal dispute over OS/2 royalty payments with rival Microsoft Corp, which originally helped IBM build the operating system. IBM's OS/2 strategy is aimed at overturning Microsoft's dominance in the operating system market. Microsoft has shipped about 10 million copies of its popular Microsoft Windows program. Analysts believe IBM is selling its operating system at a great loss. Analysts estimate that while IBM sells OS/2 at $50 to $75 per copy, it also spends about $26 on materials and $23 on royalties to Microsoft.

IBM will enlist help from its 344,000 employees to market the OS/2 operating system. IBM will offer various incentives including medals, IBM hardware and software, and cash, to encourage employees to help sell OS/2. IBM's employees will be asked to approach neighbors or dentists or school boards, or anyone who might be interested in the product, praising OS/2 as the solution to everyone's computing problems. IBM also plans a major advertising campaign. IBM is involved in a desperate fight against Microsoft Corp, which is waging its own marketing campaign in support of Microsoft Windows, the graphical interface. Microsoft is also planning to spend many millions of dollars in advertising. Much of Microsoft's effort will reportedly go into making its product easy to use. Microsoft will train dealers, offer workshops for Windows users and provide information about how to use the product.

Microsoft Corp plans to launch a campaign that encourages microcomputer manufacturers to display a Microsoft Windows logo on the face of computers, product packages and in advertisements. The logos will indicate whether a computer optimizes the Windows software or whether the computer comes with a pre-installed version of Windows. The marketing plan is one way Microsoft hopes to change the concept of a personal computer (PC) from meaning IBM-compatible to Windows-compatible. Dell Computer, Tandy Corp and Digital Equipment Corp have vowed to display the logo and hope that the mark will encourage buyers to choose their products over other microcomputers. Intel Corp utilized a similar marketing plan that encouraged manufacturers to display a sign that indicated Intel parts were used. IBM plans to encourage users to consider the OS/2 operating system.

A decision was reached in the week of May 27, 1991, in a jury trial involving charges of securities fraud against Apple Computer Inc. The decision favors stockholders who claim that Apple and its executives made misleading statements about products that were released in 1982. A.C. Markkula Jr, Apple's co-founder and a vice president there, and John Vennard, a former vice president, are liable for damages that could amount to $100 million. The jury decided that Markkula and Vennard were responsible for a $2.90 fall in the value of Apple's shares. According to Raymond L. Ocampo Jr, legal counsel for Oracle Corp, the verdict will have 'a chilling effect' on product announcements. Apple's lawyers will appeal.

Software publishers compete aggressively with each other, engaging in price wars. Spreadsheet and word processing software are areas in which pricing has become a key factor in marketing. Price cutting strategies are popular within the software industry because production costs are minimal compared with the $300 discount price for much business software. Mail-order houses and warehouse stores offer top quality software at discounted prices, but buyers can often obtain the same software for less than half the discounted 'street prices.' IBM PC software vendors used to avoid price competition because most customers were loyal to particular products such as Lotus Development Corp's Lotus 1-2-3 spreadsheet, WordPerfect Corp's word processor and Ashton-Tate's dBASE data base software. These packages carried a list price of $495 or more and sold at discount for $250 or more. Borland International Inc initiated price cuts on its Quattro spreadsheet for people who switched from a competitor's product. Many vendors are employing price- cutting strategies since Microsoft Corp introduced its Windows graphical user interface.

Ing. C. Olivetti and Company is seeking to regain momentum in the portable computer market by emphasizing the European technological, manufacturing and design qualities in its new line of products. The company is Europe's fourth largest microcomputer vendor. It is seeking to gain some of the portable market share from established leaders Toshiba Corp, and US-based Compaq Computer Corp by pricing its new products 10 percent less on some models. In 1990, the portable computer niche accounted for 12 percent of all European microcomputer sales. The new products are said to address the weight and size problems that have plagued previous Olivetti portable product offerings. The product line is made up of two basic laptop models and three notebook models, based on the Intel 80286 and 80386SX chips.

Apple Computer Inc plans a $25 million three-month ad campaign in the US. The campaign, which was created by the Omnicom Group's BBDO agency, promotes the Macintosh microcomputer, emphasizing three low-priced models. Slated to start Oct 13, 1990, the marketing effort is Apple's most aggressive in recent years, and aims to dispel Apple's image as a manufacturer of microcomputers that work well only for desktop publishing. Ironically, it was the desktop publishing capabilities of its machines that Apple itself had espoused most strongly only a few years ago.

Borland International Inc is selling its Quattro Pro spreadsheet software to owners of Lotus 1-2-3 spreadsheet software for $99 in an effort to penetrate Lotus Development Corp's dominance of the spreadsheet software market. The MSDOS-based software is priced below Lotus 1-2-3 upgrades, which typically run around $150. Borland has sold 200,000 copies since introducing the software in the fall of 1989 and is winning customers on merits other than price, including the graphics and linkage of data from different spreadsheet files. Borland's revenue is expected to total $36 million for the 1st qtr of FY 1990 as compared with $23 million in the same quarter in 1988.