MICROSOFT READY FOR A BITE OUT OF APPLE WINDOWS SOFTWARE MAY OPEN THE DOOR TO MARKET DOMINATED BY MACINTOSH

With smoke, loud music and MTV-style videos, Microsoft Corp. this week formally introduced its new version of Windows, a software product designed to make IBM personal computers and their clones as easy to use as Macintosh computers.

Bill Gates, Microsoft's 34-year-old chairman, told hundreds of financial analysts, journalists and others at a New York theater that Windows is "a major milestone in the history of the PC industry."Many analysts agree. They say Windows could provide the strongest challenge yet to Apple Computer Inc.'s popular Macintosh by grafting its user-friendly operations onto International Business Machines Corp. personal computers and compatible models - machines that are notorious for their arcane commands.

Gates told the standing-room-only crowd - and, by satellite hookup, audiences in six other cities nationwide - that his software company, which is based in Redmond, Wash., will spend $10 million promoting Windows over the next six months. He called that a record for the software industry.

Microsoft plans to mail 400,000 demonstration copies of the $149 software to personal computer users, Gates told the audience after a sound-and-light show that mixed hype, humor and product demonstrations.

More than 30 personal computer companies have said they will include Windows with their machines, and dozens of software companies are making applications programs compatible with the new version of Windows.

Windows could provide a major boost to Microsoft, which already dominates the personal computer software industry. Shearson Lehman Hutton Inc. projects Windows and related products will reap nearly $500 million in revenues for Microsoft in the fiscal year that starts July 1.

"I think it's the most significant announcement since the introduction of DOS," said Rick Sherlund, an analyst at Goldman, Sachs & Co., referring to the operating system for IBM personal computers developed by Microsoft.

"This delivers a lot of the capabilities that normally have been associated with the Mac to the PC," he said, referring to IBM machines and their knockoffs.

The loser, of course, could be Apple. A Windows-equipped IBM clone could sell for as little as half the price of a Macintosh.