MS drops Vista retail price to spur sales

Microsoft late yesterday said it would drop the price of retail copies of Windows Vista, timing the drop with the release of Service Pack 1 for the OS. The cuts will take effect worldwide and will be largest for the top-end Vista Ultimate edition, reducing the up-front price for a full copy from $399 to $319. An upgrade version for existing Windows owners will now cost $219, down from $259. Home Premium, the most common version of the software, will drop from $159 to $129 for an upgrade-only version of the OS.

Developing nations will receive one of the larger discounts as Microsoft will stop selling upgrade editions but offer full versions at the lower upgrade prices; in these areas, a combination of piracy and a largely first-time customer base are the motivation for the drop, the company says. Prices for OEM (original equipment manufacturer) copies meant to ship with new PCs currently remain unchanged, as are prices for Vista Business and Home Basic.

The discount is primarily to accelerate sales of upgrades to users still running Windows XP or earlier versions of Windows, says Windows Consumer Product Marketing corporate VP Brad Brooks. In the year since Vista's release, the "vast majority" of Vista copies were sold as OEM versions for customers upgrading to new PCs rather than retail editions, Brooks claims. Those that have bought Vista separately from their computer have usually been early adopters, while most other customers have been more likely to buy during promo campaigns Microsoft has tested over the past year.

The move puts the price of an upgrade copy of Vista Home Premium at the same price as a full copy of Mac OS X Leopard and may be an attempt to revitalize slumping Vista sales. Despite its role as Microsoft's primary OS, it was preloaded on a relatively low 37 percent of all new PCs in 2007 and has gradually seen its sales rate slow over the past several months.

Stand-alone upgrades are also widely considered as faring poorly due to Vista's steeper system requirements, which have led to many basic systems running the software poorly. A recent lawsuit has accused Microsoft of providing misleadingly low requirements through its Vista Capable logo program from late 2006 and early 2007, which encouraged sales of computers during the months between the announcement of Vista's last delay and its actual release.

Filed under: industry
Other story tags: Microsoft, Mac OS X, Vista, Windows