Microsoft Corp is on track to release its new Windows 7 operating system in time for the holiday shopping season, an executive said on Monday, confirming talk it is ahead of its own conservative schedule for replacing the unpopular Vista system.

The world's largest software company has so far been vague on specifying the timing of its new operating system, wary of disappointing customers. But it has broadly targeted the end of this year or the beginning of next year.

Windows 7 is tracking well for holiday availability, Bill Veghte, senior vice president of Microsoft's Windows business said at an event on Monday, citing good test results on the early version of the system released to developers and the public over the past few weeks.

Last month, Microsoft said Windows 7 was on track for launch in fiscal 2010, which could mean as early as July this year.

That inspired some hopes Microsoft would be able to take advantage of both the back-to-school and holiday shopping seasons, which usually bring a spike in computer purchases and accompanying software.

But Microsoft is taking care not to rush.

Many are pushing us to release the product sooner rather than later, but our focus remains on a high quality release, said the head of Microsoft's Windows business, Steven Sinofsky, in a blog on Monday.

Over the last few weeks, Microsoft has been releasing an early version of Windows 7, known as a 'release candidate,' to developers and the public.

Once it makes some more adjustments to the software, the next stage is for Microsoft to hand the system to PC makers -- known as release to manufacturing, or RTM -- to install on machines sold in shops.

Ultimately, our partners will determine when their PCs are available in market, said Sinofsky in his blog. If the feedback and telemetry on Windows 7 match our expectations then we will enter the final phases of the RTM process in about three months.

That would put the company on track to have PCs with Windows 7 available this holiday season.

Microsoft's operating systems, installed on the vast majority of the world's PCs, are still the backbone of the company, providing more than half of its $4.4 billion profit last quarter.

The disappointing Vista, launched to the public in 2007, was incompatible with some low-power machines and perceived by many to be too complicated.

(Reporting by Bill Rigby; Editing by Derek Caney and Andre Grenon)

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