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Exchange Rates Spell High Prices for Windows 7 In the EU
CWmike writes "European customers will pay up to twice as much for Windows 7 compared with US users, even though the new operating system will ship without a browser in Europe. Some of the money Microsoft stands to make on the European editions of Windows 7 comes from the weak dollar. Last week, for instance, the dollar fell against the euro the most in a month, hitting $1.41 per euro. For example, Windows 7 Professional, the key retail edition for businesses, will sport a price tag of 285 euros, or $400.60, and £189.99, or $313.84, at Saturday's exchange rate. In other words, EU customers will pay twice the $199.99 U.S. price; U.K. buyers will pay 57% more. And depending on your view on bundling IE, Europe's customers will be paying more for less, with Microsoft's decision to yank IE8 from Windows 7 in an effort to head off EU antitrust regulators, who may still force the company to take more drastic measures."
If the Euro has more buying power than the dollar (lets say it's double for ease of math), wouldn't the price of something be $10 in the US and €5 in Europe?
Interestingly enough, when the dollar was strong against the Euro (e.g. 1 Euro = 0.8 US$), we did not have the reverse effect. At that time in Europe, Prices of goods from the US were just increased.
There are other options these days.
I think you might have that a bit backwards. If .eu says that Microsoft isn't playing by their rules, and the prices go all askew, competitors will eat MS's market in that region. There's already been many stories about various European governmental entities using various Linux distros as a Windows replacement. It'd be great to have alternatives to Windows become the standard operating platform across an entire 1st world country.
However, at this stage piracy will still keep Windows in the dominant user position.
If you don't like the price, then don't buy it.
Don't pirate it either. Use something else.
But don't pirate it. If you do, you're doing what Microsoft considers "the next best thing" - ignoring alternatives. Alternatives scare the piss out of Microsoft. Back when Microsoft didn't have a stranglehold on the market, people were happy enough pirating 95 and 98, while ignoring things like BeOS and OS/2 (both competitively priced and more powerful) and it suited Microsoft and Bill Gates just fine.^1 Both OS/2 and BeOS are gone from the market because of piracy's market distortion.
Hopefully Windows 7 will come with an even more strict WGA and OGA to extract more pain from consumers. Maybe they'll wake up.
--
BMO
1. Of course, Microsoft executives prefer that people buy, but theft can build market share more quickly, as company co-founder and Chairman Bill Gates acknowledged in an unguarded moment in 1998.
"Although about 3 million computers get sold every year in China, people don't pay for the software. Someday they will, though," Gates told an audience at the University of Washington. "And as long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade." http://articles.latimes.com/2006/apr/09/business/fi-micropiracy9
In IT and a few other industries they dont bother with complicated things like exchange rates so :
$199 == £199 == â199
the result of this is that we get really ripped off on some products.
How does that even work? If the USD is low, shouldn't that make american products cheaper?
The usual answer is "customers want a stable price for software, we don't bother tracking the exchange rate on a day by day basis." In the EU they have fixed prices in euros, pounds whatever.
A weak dollar means the nominal dollar price is higher. They could price lower but they are not in the business of selling at cost+n%, they are business of pricing at whatever the local market will bear. That doesn't change much with the exchange rate.
A neighbour asked if I would build him a grunty machine to do video production and as a general use computer. He told me he had heard Vista was a nightmare, he needed a machine now, and he wasn't sure what he should do.
I told him that XP probably wouldn't 'get the juice' out of the current generation of processors properly and that windows 7 won't be out for a while and would he like to give Ubuntu (studio) a go. I told him he would at least save on the price of a copy of windows and he might be able to buy some other gear. As suggested by a slashdotter here I let him know that there would probably be problems as any computer has but we can work through any issues that arise, so far all has gone well.
I was pleasantly surprised by the latest Ubuntu Studio Jaunty release. His video camera and mobile phone worked with it immediately, the webcam on the ASUS monitor works well with skype. We setup Amarok for his music collection. I showed him how to install more software, told him there were other video programs aside for Kino but to give this one a go, now he is using it to make dvd's of his fishing trips.
My neighbour is a fireman, and is quite humble about his proficiency as a computer user. I told him the machine is NOT windows or a mac but he is using the machine with confidence blowing away any pre-conceptions in my mind of Linux usability. He is about as far away from being a Linux geek as anyone can be and keeping the purchase price of windows, to him, meant he could afford a kick ass logitech speaker setup and most of the purchase price of a new HP printer. When I asked him a few days ago about how the new computer was going his exact word were:
"I'm lovin' it"
Linux may not be ready for the desktop, but I think it's fast becoming the new value proposition.
My ism, it's full of beliefs.
Microsoft actually wants me to leech this off of BitTorrent. There's no other explanation.
I am confused. Where does this feeling of entitlement to someones product come from? If you don't agree with their pricing for Windows 7, you are free to use the older version if you have it or switch to any of the many different free operating systems available.
Simple:
How do you think they'll make pay the EU for the fines? By making windows more expensive!
Occam's razor does apply here.
Easy peasy.
Cheers,