Microsoft Cuts Vista Price In 70 Countries

dforristall alerts us to an odd move by Microsoft: cutting the price of retail boxes of Vista in many markets. Analysts didn't see this one coming, and they are scratching their heads a bit over it; one called it "very unheard of." The price cuts vary by country — they're largest in the developing world where piracy levels are high — and they don't apply to OEM copies of Vista, which account for 90% of sales. "Gartner analyst Michael Silver said the move... is puzzling... [He] noted that the market for such upgrades is fairly limited. Those who bought XP in the fourth quarter of 2006 got a coupon for a free Vista upgrade, while most of those who have bought systems since then have gotten Vista. Machines purchased prior to 2006 probably aren't all that attractive as candidates for a Vista upgrade... 'The whole notion of upgrading PCs has sort of fallen by the wayside.'"

Comments

They need to drop the price of XP

[tritonman]

THey need to drop the price of XP so I can buy it to replace my copy of Vista.

This is aimed at power users...

[tjstork]

I have a dual Opteron with a fairly decent graphics controller that would be an ideal candidate for Vista x64 Ultimate. But, for about $400 cheaper, (or $200 if you get the system builder edition), I downloaded Ubuntu and it works great.

Taken together, Microsoft's actions of the last few weeks : decreasing the price of Vista, giving away Visual Studio to Students, publishing specifications, all point towards an effort to attract developers to their platform. Even the channel partnerships that I railed about earlier are structured to attract developers. Clearly, Microsoft knows something that we don't know, and, I think it is that Linux development is starting to reach a critical mass for them to be really concerned about it. I wonder how much trouble Microsoft realizes it is in.

There is a demographic factor going on as well. A lot of we formerly reliable Windows zealots are now in our 30s and 40s, and suddenly money that would be spent on graphics cards and Windows upgrades is now getting plowed into our over-priced houses and our children. It's like, I would have stayed up in line to get Vista Ultimate the day it came out, but instead, I bought diapers, soy milk and a thomas the tank engine train set for my son. Having jonesed for some sort of an upgrade to my PC, I went with Ubuntu instead, and its pretty satisfying.

Linux has hit that point where, it may not be the best in terms of a consumer operating system, but its often good enough, and installing it just works.

Re:This is aimed at power users...

[Jason Levine]

Linux has hit that point where, it may not be the best in terms of a consumer operating system, but its often good enough, and installing it just works.

That statement there might be the scariest thing for Microsoft. Microsoft pretty much based their entire business around "good enough." If Linux is "good enough" also and has the added benefit of being free, then that will take sales away from Microsoft. That combines with Microsoft's main competition (their own older versions which are "good enough" for most people) to make for a really bad situation for Microsoft to be in.

Re:This is aimed at power users...

[aslvrstn]

But what percent of people EVER install an operating system? Microsoft has the advantage of being "good enough" to not have people reinstall another operating system over top of them. That's all they need. Linux, however, needs to be "better enough" to force people to reinstall, or have someone reinstall, their OS.

Re:This is aimed at power users...

[TrekCycling]

I think there is something else going on with that demographic you mentioned earlier that's also germane. If that power user demographic played games they're not gaming as often on a PC. Their kid is playing a DS (tons of those have been sold), they're playing a 360 or a Wii. That demographic (I say that because my friends and I are in it) are largely buying cheap computers and running Ubuntu and then using the money we might have spent on Vista and a new graphics card on a new video game system.

In fact, you could make a pretty solid argument that Microsoft's success with the XBox has severely undercut the PC market. Take out a large chunk of gamers who are no longer upgrading their PCs to play the latest game and you're left with a few enthusiasts and everyone else is running a computer that's "just good enough". Vista is completely unnecessary. Oh, and they did a good job with XP, honestly. Good enough that most people seemingly see no reason to switch. Even if it's given to them.

Re:This is aimed at power users...

[Anonymous Coward]

As a person who has been in the industry about as long as Microsoft, I can honestly confirm that their entire business model was originally based on "very cheap and good enough". Later on, they relied on the fact that "everybody uses it". This made sense, as the original PCs were nothing special from a performance point of view. In the beginning, the IBM name was enough to create a de-facto standard.

From the very beginning, there were better alternatives to MS-DOS. Problem was, they were expensive and not viable on low-end hardware. Microsoft's attempts to move upscale have been a mixed bag. Apple did a better job [eventually] on the desktop, and Linux took over the low end of the spectrum (along with a huge threat on the server side and the possibility to go upscale on the desktop as well).

This brings us to where we are today -- a scary time to be Microsoft. As far as pricing is concerned, how low do they need to go if Linux is free? Is low pricing of any use against OS X? I doubt it.

It may be impossible for MS to maintain compatibility with the installed base AND go upscale at the same time. Either way, they are vulnerable to attack from competitors on all sides. From the customer point of view: If you have money to spend, OS X is great. If not, Linux is cheaper. Who needs Vista at any price?

Re:The whole idea of upgrading PCs???

[Anonymous Coward]

Speaking of your sig, that should be "Nazis" not "Nazi's".

still waiting

[TCFOO]

I'm still waiting for Microsoft to pay people to upgrade to Vista. Ever check the resource consumption on the display models, half the resources are being used just to display the desktop.

Why on earth were they surprised?

[sheldon]

In an interview, newly minted Windows consumer marketing vice president Brad Brooks said that Microsoft had been testing lower prices over the past few months and was surprised to find that the amount of revenue lost was more than made up for by an increase in the number of PC buyers willing to shell out for an upgrade.

Didn't they learn this lesson with the Student/Teacher version of Office?

Duh

Re:Why on earth were they surprised?

[orlanz]

They are surprised because, as a monopoly, they didn't think fair market economics would show up on their line graphs.

Re:The whole idea of upgrading PCs???

[MightyYar]

Wooosh.

Not enough

[stoolpigeon]

When Vista Ultimate upgrade costs almost $200 and Kubuntu 7.10 full costs $12 (if you don't feel like just downloading it) - it seems reasonable that some prices are going to have to come down somehwere.

Re:i know whats coming next

[ShieldW0lf]

They got paid by large private and government interests to put Trusted Computing on everyones machines so they can engage in widespread information control. They would LIKE more money from the consumer, but they MUST achieve widespread deployment for this to be realized. If it's realized, they will have a power the likes of which has never been seen before on earth, and money will be the least of their concerns. If it's not, they will become a niche product. It's pretty obvious where their motives lie, and their actions are entirely sensible if you understand their motives.

Re:Oh yeah

[cordsie]

This is absolutely correct, and it's almost as if the entire OS/hardware industry is grinding to a halt for these reasons.
Though the possibilities of what you can do on a computer are theoretically limitless, but in practice there's now a small set of functionality (web access, email, office type stuff, or media manipulation apps) for which 99% of people need computers for. Most of what we have is good enough. Over the past twenty years a lot of the advancement has been due to improvements in graphics, which led to directly obvious improvments in usability, and vice versa, but this has plateaued at what we have now. Nobody has come up with any convicing 3D GUI designs that have been demonstrated to be any better or more efficient than where we already are.
Even on the gaming front, consoles appear to be slowly but surely taking that role away from the PC. The endless cycle of nvidia-ATI upgrades is getting old, and I've got better things to spend my money on.
Advancement these days appears to be mostly in server side apps and web-distributed content, and it's as if we've gone full circle back to the days of the dumb terminal. If you're an average user, and your machine keeps working, why do you need to upgrade?
You don't, end of story.

I don't think so

[geekoid]

"I think it is that Linux development is starting to reach a critical mass"

Maybe, but I haven't seen a large trend towards that through the industry.

What I think is happening is that MS as a place to work has been stagnent in the last few years, and MS needs good developers.

There is no opportunity to get rich anymore, there reputation stinks, they have been cutting back on developer perks, but still expect 60+hours a week.

Ballmer is right in that it's about the developers, but MS isn't handling it's transition from skyrocketed company to, a strong but steady market force very well. This is typical. Developers seem more like a commodity that can be swapped around by Accounts. Which is fine,if accountants are tempered with good upper management that backs the developers concerns.

The top management may be deluded and think MS got the great developers it did in the early 90's because it's a great place to work. Instead of a great place to get rich.

I have said this for years, MS will go to an existing OS and brand their GUI on it, or die. You can not turn out a good solid OS in 10 years of development, you also need 10 years of in the market maturity.

I was astounded when Apple did it. Man, that blew me away. It's a good move that will keep you from reinventing the wheel.

Re:i know whats coming next

[Anonymous Coward]

If it's realized, they will have a power the likes of which has never been seen before on earth, and money will be the least of their concerns.

Pinky: What are we going to do tonight, Brain?
Brain: The same thing we do every night, Pinky. TRY TO TAKE OVER THE WORLD!!

Wireless Ubuntu Works

[tjstork]

So you didn't save as much, and good luck if you ever want to use wireless with that Ubuntu computer.

I am wireless with the Ubuntu computer. I didn't have to do anything. When I installed Ubuntu, I got the little wireless icon on my upper right hand corner, hit connect... to my wireless network, and it completely worked, just like the little wireless icon on my Windows XP does.

Not odd at all

[gilesjuk]

Vista costs twice as much in the UK as it does in the US.