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.'"

They need to drop the price of XP

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

Re:They need to drop the price of XP

What's stopping you from getting rid of the unwanted icons on your desktop? I'm not an MS fan but I dunno what you're complaining about here - no OS that I've ever seen (well, apart from cut down stuff like the EEE PC) just has application icons and nothing else - you generally would have either the drives or a 'my computer' equivalent showing.

Most people generally find the ability to browse the internet, see pictures, play music etc quite useful. How exactly do you propose getting new apps onto your computer if you don't have some basic form of web browser anyway? Are you going to order everything on CD? Way to be traveling in the wrong direction..!

Oh, and Mac OS actually includes very good built in software for almost everything you said up there, apart from the drawing pictures (AFAIK). Personally I don't like iTunes though, so as well as Firefox and the GIMP, I downloaded VLC. I see no problem with any OS distribution including applications that can make the thing more useful though. If you don't want all that stuff in Windows, remove it in the Windows configuration bit in add/remove programs.

This is aimed at power users...

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...

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...

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...

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?

I don't think so

"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:This is aimed at power users...

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.

Wireless Ubuntu Works

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.

still waiting

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?

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?

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

Not enough

When Vista Ultimate upgrade [amazon.com] costs almost $200 and Kubuntu 7.10 full [amazon.com] 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.

hardware upgrades

Machines purchased prior to 2006 probably aren't all that attractive as candidates for a Vista upgrade. "I guess at the end of the day anything that makes Vista a little bit more accessible is probably a good thing," he said, but added that a cut in the price computer makers pay would have a far bigger impact, given new PC licenses account for 80 percent of Vista sales. "The whole notion of upgrading PCs has sort of fallen by the wayside."

While that may apply to Joe Blows who aren't tech savvy, I wouldn't say that it applies to all customers. Those who actually build (assemble) their own computers know the importance of hardware upgrades. I recently acquired my brother's old setup (AMD X2 4200+) with a 7900GTOC, which is a pretty good upgrade from my old CPU/mobo/GPU as well as 3 more gigs of memory, but rather than try out the 64 bit version of Vista (which I was tempted to do) it just didn't seem worth it to me with all the lack of hardware drivers, and software compatibility issues so I just did a fresh install of XP Pro (with fedora 8 on the 1st partition) rather than deal with the headache of trying to fix any issues that would arise.
What I think makes the brunt of those new sales is that people who have the money to shell out for what the salesman at best buy tells them to get, will also shell out for the newest thing, which in this case is vista in terms of OSs. I will personally feel fine using XP until Vista's issues are either resolved or it's put in the ground.

Comparison to Apple

Lately I've been seeing a lot of criticism point at Apple when they do the same thing Microsoft does. Let's turn it around, eh? When Apple cut the cost of the iPhone, quite a few people were screaming bloody murder about Steve Jobs and his evilness. So where is the outrage over the Vista price cut? Where is Bill Gates promising to send a rebate to all the people who "overpaid" for their copy of Vista? I'm not trolling here, I suspect the reason is that MS waited just long enough for the sensationalism to fade before they dropped the Vista price whereas Apple didn't wait long enough. Since I haven't bought either of these products, I'm going to have to rely on others who have...

Not odd at all

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

Re:The whole idea of upgrading PCs???

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

Re:The whole idea of upgrading PCs???

Wooosh.

Re:The whole idea of upgrading PCs???

From what I remember they did the same thing with windows Me. nobody was buying it and they were desperate to sell it so they lowered the price drastically.

People still Ignored it with the low prices. I have a real retail copy matted and framed in my office as incredibly few people have ever seen one.

Re:i know whats coming next

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:i know whats coming next

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!!

Re:i know whats coming next

If I were representing big interests i wouldnt' bet much on MS. Nor on software. Hardware backdoors are better. Try and detect those in a multi layered nanometer scaled impossibly complex circuit.

Of course, naming a chipmaker INTEL doesn't help reassuring tinfoil hats :D

Re:i know whats coming next

It can't be that hard - today's chips are only fabbed using 2D construction, so you just need to get a magnifying glass and a light, and look for the reflections coming off the little door handle or knocker.

Re:i know whats coming next

I don't know why someone marked the parent as troll, but it's unfair as this is a reasonable explanation as it both fits the observed fact and there are groups with means and motive to do this. We also have previous instances of this sort of behaviour from these groups and of private companies complicity in such activity (including Microsoft). As to the other poster who discounted this because a hardware solution would make much more sense, that's hardly a solid counter-argument because a hardware solution would firstly be more difficult to implement, crossing multiple areas of hardware requirements and manufacturers in all probability (including manufacturers in countries such as Germany and China), we don't know what companies behind the scenes are amenable to aiding US spying efforts and a hardware solution seems likely to be less flexible.

This is not to say that this is the reasoning behind Microsoft's desperate attempt to get people to take up Vista. A private awareness that if they don't lock people into their O/S using the drm mechanisms in Vista, that they're in serious trouble. Could also be the reason. Or it could be multiple reasons. But certainly the parent shouldn't be modded a troll because it's a strong possibility. Installing subversive software on people's machines is one of the first things that I thought of when I read this article.

Re:Oh yeah

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.