Microsoft Cuts Vista Price To $66 In China

narramissic writes "Microsoft this week cut the retail price of Windows Vista Home Basic in China by 67% — from 1,521 renminbi to 499 renminbi ($65.80). This is a steep discount compared to what users in the US and elsewhere are charged for the software. The reason for the price reduction? Battling piracy, of course. The new pricing 'narrows the price gap between original versions of Microsoft's software and pirated copies,' making it that much easier for consumers to 'do the right thing.'"

Yeah, but everyone steals Ultimate....

[tjstork]

IT's silly, why pay $66 bucks for a copy of watered down Dista when you can steal Ultimate? I mean, if you are in a country that has no IP enforcment, why not just steal the best one?

Re:

[hax0r_this]

Newegg has "Home Basic" OEM for $90, and I doubt their prices are the cheapest around. And the retail is "only" $150. The price difference between vista basic in America and China is almost insignificant compared to the price difference between XP in America and China.

Re:

[insertwackynamehere]

The difference in OEM and retail price is also pretty cool. I got Ultimate for $180 from Newegg because it was OEM. Retail would have cost be $400. I saved $210 because I didn't want a box (and because of the OEM licensing which really didn't change any of my plans about how I was gonna use Vista)

Re:

[somersault]

"my plans about how I was gonna use Vista"

Hopefully these plans included a large pile of very dry wood, some gasoline, and a shaman head-dress?

Re:

[Adambomb]

Arise system! System arise!

Re:

[Anonymous Coward]

Don't you mean Ulimate [newlaunches.com] and not Ultimate?

Re:Yeah, but everyone steals Ultimate....

[kimvette]

Why? The $66 version comes with extra features, such as regularly phoning home to Microsoft to send information about usage patterns and installed software, while presumably the pirated/hacked version will not. How's that for the value of being a paying customer?

Okay, I admit I set up a straw man there, but I couldn't resist. I'm not making a serious point here, just a cynical comment.

Re:

[misleb]

Also, $66 is still pretty damn expensive for most Chinese, AFAIK. So even if they wanted to buy the $66 version, I doubt they could realistically afford it.

The nice thing about software though is that you can charge whatever you want for it and still make a profit. That is, if there is a difference between selling it for cheap and not selling it at all. Expect to see further price cuts from Microsoft.

-mathtew

Re:

[CastrTroy]

But your parent poster was basically saying it's better to sell your software (for whatever price) than not to sell it at all. Obviously you probably won't recoup your dev costs if you sell it to everyone for a penny. But if you find a group of people who don't buy your product (like the chinese), and can get them to buy the product by reducing the price, then your are going to make more money. It's a profit maximization technique. They do this all the time in software. They charge the maximum that mos

Re:

[misleb]

To a point - you have to recoup your development costs, and those tend to climb exponentially with the complexity of the product.

Like I said, if it is the difference between selling it cheap and not selling it at all, most any price is profit. Perhaps "profit" is the wrong word. The point being that, with software, there is very little cost in producing an individual copy. It isn't like hardware where you have a significant cost to make each individual item (on top of the R&D) with maybe a 30% markup

Because stealing is a crime

[jesterzog]

I mean, if you are in a country that has no IP enforcment, why not just steal the best one?

Perhaps because in China, stealing is still treated as a serious crime, and is often (I think) enforced quite heavily. A better course of action for people in China would be to infringe on the copyright, which is not seriously enforced.

Unless, of course, you've fallen into the semantics of the stop-copyright-infringement lobby groups, who would love it if everyone saw the complicated artificial legal definition of copyright infringement as being equivalent to horrible crime of stealing. In that case, yes, they should steal the best one.

Re:

[Endo13]

Now that sounds like a copy of Vista I might actually consider for a trial run.

More Piracy?

[stars_are_number_1]

Does this mean we need more piracy in the US to bring the price down?

Re:

[CaptainPatent]

Or better yet, more Chinese imports of Vista.

Not only could you get a legal copy, but they would have to compete with their own prices here!

Interesting pricing, for sure

[TheAxeMaster]

I know it is the "less money is better than no money" mantra that they are trying to apply, but I still find it fascinating that a relatively non-free market is getting a better price for the same product than a supposedly free market like the US and European countries. It looks like "illegal" activities can be an artificial competitor when no direct competitor exists. The question is, will people in China buy it, even at this price? I really doubt it. I wonder what the EULA looks like...

Re:Interesting pricing, for sure

[Mistlefoot]

Average income in Beijing is 15,600 RMB (chinese dollar) per year. That's 1300 RMB per month. With Vista at 500 RMB that's a good chunk of change. Even Beijing residents with a University degree only averaged 3,000 RMB per month.

In the US, average income is $36,000 per year. Or $3,000 per month. Vista would have to cost ovder $1,100 to take up as great of a part of our income.

Note that the original price (1500 RMB) was more than one months salary for the average employee in Beijing.

If Vista cost us $1,100 I can guarantee it would be pirated to a much greater degree.

http://ask.yahoo.com/20040518.html
http://www.chinadaily.com.cn/english/doc/2005-02/2 2/content_418101.htm

Re:

[HungWeiLo]

If everyone had to opt-in to pay an extra for $90 every time they bought a computer at Best Buy, you'd see a lot of piracy too.

Re:

[Maxo-Texas]

But we compete with chinese for jobs based on the fact that they are paid less.

If they get discounts on everything, they continue to lock in that advantage.

The price should be the same there and here for the same products. It is much worse in the area of medicine where the difference can be $5.35 vs $.10 .

Corporations have a lovely double standard where we pay more and they get to use labor that costs less.

They are basically pumping all accumulated wealth out of the 1st world into their pockets.

And we are

Re:

[DDLKermit007]

Those people are a HUGE exception, and are in fact upper class if they make that much. China really has next to zero inflation because wages are so low. I just got back from there 2 months ago, and will be going back later this year. I got to deal with people who would be considered fairly high end in the US, and they get paid crap. Those figures in the article aren't very far off. It's a country where a taxicab driver can make 15,000rmb, and watch 2/3rds of it go to the government, and those with power's p

Re:More Piracy?

[TubeSteak]

Does this mean we need more piracy in the US to bring the price down?

I doubt that would work.
Piracy is incredibly pervasive in Asia
Microsoft is using the carrot, because they don't control the stick.

In the USA, Microsoft has the stick firmly in hand (in the form of lawsuits, the BSA, politicians, and law enforcement) and only occassionaly dangles carrots (in the form of discounts to specific groups).

Re:

[Crayon Kid]

In the USA, Microsoft has the stick firmly in hand (in the form of lawsuits, the BSA, politicians, and law enforcement) and only occassionaly dangles carrots (in the form of discounts to specific groups).

I don't see it like that. They don't control the stick in the USA anymore than they do in China. It's simplay about very different end user mindsets.

Think about it. As far as businesses are concerned, OK, it's not nice to live in fear of a BSA raid. But who the heck is gonna raid an individual's home? Who's

Re:

[petermgreen]

Who's gonna know he's not using a legit copy of Windows?
well there is wga, at the moment it seems they are being nice and just using failures to try and sell legit copies. However some must be wondering if and when MS will decide to go after someone who gets a wga failure and doesn't pay up. IIRC they are already giving rewards for snitching on the person who supplied the pirate software. The BSA has meant that corporate IT departments are paranoid about avoiding piracy and some of thier campaigns must rub

Re:

[account_deleted]

Comment removed based on user account deletion

Re:More Piracy?

[QuietLagoon]

Does this mean we need more piracy in the US to bring the price down?

It does show that a monopoly results in consumers paying a ridicuously high price for the merchandise.

Re:More Piracy?

[SanityInAnarchy]

Right, and it does show that they can compete with free.

It makes one wonder, if Linux and OS X were more successful, would Windows even cost $50 in the US?

Re:

[hclyff]

A monopoly...on a piece of intellectual property brought into existence by a company. That makes sense. I mean, it's not as if there are alternatives, right? Oh, wait, there are literally dozens of them. I forgot.

Apparently one can have a monopoly when there are dozens of alternatives, some of which cost $0. I guess I learned something today.

If I understand it correctly, monopoly is a state of market when there is lack of substitutes for certain product. Now, name an operating system which has remotely comparable SW/HW vendor support. If there isn't one, it's still monopoly. It doesn't matter that there are similiar products, because unfortunately they can't be used instead of Windows in most settings.

Re:

[RightSaidFred99]

By that definition, Apple has a monopoly on OS X and the Ipod. Oh, I know I can buy other MP3 players but name me one which supports AAC, Itunes, and all the Ipod accessories.

That last sentence, where I make arbitrary demands in a tranparent attempt to gerrymander the Ipod into being a "monopoly" is exactly what you're doing. Add enough ridiculous constraints (oh, but I want to play game X or run specific application Y) and any product is a monopoly.

Re:

[alcmaeon]

Apparently it does. This is exactly what I was thinking. I bet Congress and the Fed would even support us on this. Piracy and theft and anti-inflationary economic pressures makes sense.

Re:

[account_deleted]

Comment removed based on user account deletion

Re:

[ozbird]

Or you could just buy a copy from China?

Values approaching free?

[avronius]

Maybe we'd like to do the right thing here for a dollar amount that gets closer to 0, too.

Fortunately for me, I'm happy enough with my games in XP - it's just a platform, after all.

Re:Values approaching free?

[mhall119]

Some of us already do the right thing here, and the dollar amount is exactly 0.

Relative to Income

[Anonymous Coward]

So what is that, like 2 months of a person's income there?

Reduce it to two or three day's income like it is here for the average person. Then you'll hit the point where they can afford it instead of stealing it.

Re:

[Spudtrooper]

What, so they can run it on their $199 PCs [slashdot.org]?

Re:

[garcia]

Then you'll hit the point where they can afford it instead of stealing it.

And yet, it's still not as cheap as committing copyright infringement.

can only mean one thing

[SolusSD]

more money for MS. Its not like actually creating a copy of vista costs them anything-- but getting someone to spend *any* money on windows in china is good news for MS. I kinda wish they would do a better job at preventing piracy though-- it would give poorer countries a reason to look elsewhere.

Re:

[catbutt]

You should study some economics (as well as english.... their -> they're, give in -> given). Sure, people want to make money, but in a competitive situation, the price is not determined by how much money they can make, but what the competitors are selling it or. Commodity products tend to have tiny margins.

On the other hand, software has almost zero marginal cost (amount it costs to make one more item), and in the case of Windows, which is effectively a monopoly because of the network effect, the

Re:

[catbutt]

As it is relevant to this discussion, marginal cost is more important than average total cost. That is, if microsoft has a choice of not selling a copy in china, or selling one, the important thing is whether the price is over the marginal cost.

Keep in mind this discussion is about sales in china, not overall. In that sense, yes, it could indeed make sense for microsoft to sell at a price that is above marginal cost but less than average total cost.

who says piracy is a bad thing?

[MoFoQ]

who says piracy is a bad thing?
It seems to be drumming up competitive pricing for the legit items.

Wish other companies will take note.

Re:

[trewornan]

Windows came with my laptop so I paid for it but I didn't want it and never use it. I guess if you want it and use it but didn't pay for it - then all in all MS has nothing to complain about do they.

oblig. "Stalin" quote

[syntaxeater]

The piracy of one is a tragedy. The piracy of millions is a discount.

A better "Stalin" quote

[DimGeo]

There's a pirate, there's a problem. When there's no pirate, there's no problem.

So why not a deal for Americans, EU, Candians...?

[WindBourne]

The real question is why will users allow this? And can businesses and gov. make use of this

Still, Roughly 1/2 Avg or More Monthly Wages

[asphaltjesus]

Depending on where you go for the data, that's still 1/2 to a full month's wages.

I'm very interested to discover how that price decrease decision was made. e.g. was it just not selling? Did the government "recommend" it?

Re:

[colmore]

Talking about "average wages" in the industrializing world is pretty misleading.

China is a third world country that contains a first world country. Vista, computers, and internet access is being sold to the first worlders. I've seen $300 / month quoted as the base starting salary for white collar work. Which puts a Chinese office drone at about 1/4 what a US temp staffer makes. This seems about right, given that the kind of consumer price disparities here are primarily the results of China's heavy hand

Facts Please

[asphaltjesus]

Care to post a citation supporting your argument? I'm interested.

Cut and run

[halcyon1234]

Cowards! You're letting the terrorists^H^H^H^H software pirates win! You're supposed to fight them over there, so we don't have to fight them over here. You concede one battle, and what happens? The bastards got illegal and baby-raping MOD CHIPS into every single XBox in North America! Do you remember the raids? Do you remember the stacks of DVDs stored inside clear plastic jewel cases, instead of their majestic neon-green and white ones?

Re:

[mhall119]

^H is the command for deleting a single character. Your "joke" makes no sense in that aspect and is lame. Try harder next time.

"You're letting the terror software pirates win!"

Makes sense to me.

So how long until gray market copies appear?

[Registered Coward v2]

At that price, assuming it is the same as other versions sold elsewhere, it is almost at a point where bulk purchasing and shipping make it worthwhile to sell on the gray market.

Re:

[HungWeiLo]

Then Microsoft would launch a mass-education campaign telling people that CD-ROMs from China contain "stale bits" or something like that. Yamaha has been battling gray-market pianos for years (ones imported from Japan because not many people want to buy second-hand pianos there), so they tell people that somehow wood used there is different than wood used for pianos shipped to North America.

Hipocritical

[jshriverWVU]

Didn't they increase the price of their software to compensate for the so-called "loss due to piracy"? This seems counter intuitive. If they drop prices, all they are doing is giving people more reason to pirate it.

Windows is cheaper than Linux in China

[CPE1704TKS]

I read a very interesting article on Microsoft's policies in China in the latest Fortune magazine. They were talking about how for years Microsoft would try to battle piracy in China, and realized it was a losing battle, so they gave up. Instead, they opened up research institutes and kissed the ass of the government. This made the government more apt to enforce IP policy, and MSFT had a big hand in dictating it.

I remember reading that Windows + Office was about $3 US to students. In fact, in China, pirated Windows is often less expensive than Linux because Linux has more cds, which increases the cost dramatically.

Also interesting was when the interviewer asked Gates about China's policy on suppressing free speech, and Bill Gates had an internal BSOD and basically froze. After an uncomfortable period of time, the interviewer said "That's quite a pregnant pause" and Gates said "I don't think I want to answer that question."

The great thing about capitalism is that CEOs like Bill Gates who wants to make hand-over-fist in terms of money, doesn't have to give a rat's ass about basic human rights, he can choose to hide behind his business like a coward. Craig Mundie's answer was "I don't think that is my area of expertise." Cowards.

Re:

[everphilski]

The great thing about capitalism is that CEOs like Bill Gates who wants to make hand-over-fist in terms of money, doesn't have to give a rat's ass about basic human rights, he can choose to hide behind his business like a coward. Craig Mundie's answer was "I don't think that is my area of expertise." Cowards.

And you can honestly say you have never purchased anything that has run through China? No iPod? No rice? Never eaten Chinese food? Never shopped at any major chain?

If you have, you are just as much

Re:

[HungWeiLo]

Chinese food in the U.S. these days is likely to be cooked by guys named Juan and Alejandro, even at high-end authentic places. I assure you your last sweet and sour chicken contained very little if no ingredients from China.

Re:

[everphilski]

I'm not saying the employees are sending money back to China... but yes, the raw materials, I betcha you are getting some from China.

Re:

[huckamania]

Not really all that basic when you consider how much of the world doesn't really have it.

Americans cry because they can't call Pakistan without the NSA listening. Somehow listening to a conversation is an illegal act of property seizure by the government in violation of the 5th ammendment. Except the government has the right to search and seize property at the border, which your conversation -er- property is most certainly crossing.

Somehow on slashdot ripping music and movies is not theft, but the govern

Re:

[CPE1704TKS]

Hey, I did better than I thought, my memory isn't quite as bad as I feared! Thanks for posting that.

Where exactly did I misquote Gates? I think I pretty much got the gist of what he said dead on. And as to Mundie's answer, I don't find it interesting at all. He is just being an apologist of the government's actions, and dodges any questions as to what he actually thinks about the situation.

chinese online vendors == $$

[saleenS281]

So uhh... what's preventing the Chinese online vendors from selling this back to the US?

Re:chinese online vendors == $$

[lilomar]

Maybe the money saved isn't enough for vista basic users to learn Chinese?

Just a thought.

Re:chinese online vendors == $$

[fullmetal55]

hey maybe thats why chinese became so popular in the firefly future...

Re:

[saleenS281]

Right, because you can't change the default language of any MS operating systems... OH WAIT

http://beta.channel9.msdn.com/Forums/Techoff/30633 2-Change-Vista-Language/ [msdn.com]

Re:

[saleenS281]

Ummm, it's "officially" supported on ultimate or enterprise. Lord knows there's no way around it. Go back to digg.

Cheaper, but with modified content?

[Sponge Bath]

Vista Ethylene Glycol Edition

Morons why didnt you do it like that EVERYWHERE

[unity100]

and from the start ?

if you had done that, entire world would be using your licensed crap right now.

good thing that you didnt, though. else there would be no linux. for you ms fanbois out there who will go ablaze when reading what i post, im not a linux fanboy, and despite that i think that way.

The good side of Piracy...

[tgatliff]

So are we saying there is a good side to piracy? Shocking!! You mean the music industry could have just reduced their prices to compete with piracy instead of sueing every single person?

Just incase they were wondering

[pembo13]

No. I wouldn't pay $66 for it, even at American wage standards.

So if I purchase over the internet...

[AmiMoJo]

At least with XP, the keys are language agnostic. A Chinese XP key will work with an English OS and pass Genuine Advantage.

I expect eBay will soon be flooded with Chinese copies of Vista Basic and an English DVD-R.

Re:

[Schraegstrichpunkt]

Just because the key works doesn't mean it's not copyright infringement.

Re:

[AmiMoJo]

How is buying a legitimate licence which activates and passes all Microsofts checks copyright infringement?

Perhaps it could be a licencing issue, if the licence specifically says for use with a Chinese OS only. However, last time I checked and English Vista pack, it didn't say anything about that.

Re:

[account_deleted]

Comment removed based on user account deletion

Re:

[petermgreen]

Since nothing was copied illegally, and a valid serial number was purchased from Microsoft in exchange for actual money, you still feel it could be copyright infringement? I'm glad you don't make laws. Your speculation is ridiculous.
Instead of using the software you purchased you made a copy of a different product, how is that not copyright infringement?

I love America's precious freedoms.

[DysenteryInTheRanks]

A megacorporation convicted of gross violations of various antitrust laws has partnered with the dictators of China, who have committed heinous human rights abuses on live television, in order to slightly increase its own profit margins.

The megacorporation is now lecturing the victims of this dictatorship about how they should not trade their morals for money.

I am a little choked up right now. I'm just so. PROUD. To be. An. Amur. Ah. Cain.

Sniffle.

Re:

[Ngarrang]

If you are going to be evil, you might as well go all the way. None of that weak stuff.

Retaliation

[SnarfQuest]

Are we sending Windows to China in retaliation for the lead-paint and poisonous pet food that China is shipping to us?

maybe a drop in price for OS, but what about rest

[Locutus]

So those poor rural Chinese have a copy of Microsoft Windows Vista-Basic for only a few months salary. How many years salary is it going to cost them for the hardware/computer to run it on? That $199 PC we heard about recently is going to have enough power to run Vista?

And if they really think this is about piracy, think again. Those who are pirating are not going to pay $66 for Windows Vista-Home when for the same price, they can get Windows Vista-Ultimate. The difference between $2-$5 for the pirated vers

Countervailing duties

[djmurdoch]

China should slap 200% duties on Windows. Microsoft dumping it at 33% of the US price is going to harm the Chinese piracy industry.

Piracy lowers price?

[gilesjuk]

If you believe the press releases you are led to believe that piracy reduces profits, therefore a company which is affected would need to increase their price to make ends meet.

So why are they reducing prices? it's pretty obvious Microsoft realises it's software simply isn't priced realistically for the chinese market.

Clearly, Piracy Pays.

[ThatDamnMurphyGuy]

So, apparently, the way to cheaper software here in the States is to ramp up piracy. Then we can get legit copies for $75 too.

Spike Lee, can you explain this to me?

[Minwee]

The new pricing 'narrows the price gap between original versions of Microsoft's software and pirated copies,' making it that much easier for consumers to 'do the right thing'."

I don't see how narrowing the price gap between original and pirated copies of Vista makes it easier for consumers to switch to something (anything) else. What's the connection there?

I'm pretty sure the currency..

[sudog]

.. should be referenced in this case as yuan, not renminbi.

Re:

[808140]

You'd be wrong then. There's nothing wrong with saying renminbi.

Re:

[phatvw]

Yuan is the monetary unit while Renminbi is the name of the currency. So while stating Renminbi is technically correct, Yuan is more accepted in this context: http://en.wikipedia.org/wiki/Renminbi [wikipedia.org]

Re:

[808140]

Um, whatever. I lived in China for nearly 5 years, and I speak Mandarin. People say renminbi all the time. Linking to a WP article isn't going to make me think that you're correct here.

Re:

[phatvw]

Duh I missed the detail that the original article was written for a Singapore audience. In the USA, Yuan is what is used.

i get it

[Some_Llama]

so we should ramp up our piracy efforts in the US until software becomes reasonable.. check.

Two Words...

[Nom du Keyboard]

Two Words: Grey Market.

Isn't this called dumping?

[jrumney]

The US is quick to threaten trade sanctions when foreign companies try selling their products cheaper in the US than their own market. How is this different?

Would msft want windows to be pirate-proof?

[walterbyrd]

I think Bill Gates has openly stately that he considers controlling the standards to be msft's most important goal.

If windows could not be pirated, then China would either stick with old versions of windows, or use Linux, or something. In any case, that could catastrophic for msft.

I thought windows was already $50

[Punto]

isn't that what Dell is charging for it?

Re:So, logically, we should all pirate software

[Walpurgiss]

MS does it in China; yet here in the western world, the software companies use piracy as an excuse to need to raise prices. (To recoup alleged losses from e-shrink)

Re:

[account_deleted]

Comment removed based on user account deletion

Re:Let's follow their lead

[cashman73]

I hate to say it, but,... even "pirated Windows Vista" is still "Windows Vista",... you're better off sticking with Windows XP, ... or MacOS X ... or Linux.

Re:Let's follow their lead

[veganboyjosh]

that's why i pirate linux.

Re:

[BlueParrot]

you redistribute it without the corresponding source?

Re:Let's follow their lead and Do the Right Thing

[Frumious Wombat]

Did anyone notice that Microsoft's encouraging phrase is generally only seen in old movies, where the protagonist, having royally screwed up, is sitting in an otherwise empty room while his superior places a pistol on the desk and encourages him to, "Do the Right Thing"?

This may not be the revenue-enhancing event Microsoft is hoping for.

Re:

[UncleTogie]

The first image that came to mind when I read that?

Someone getting arrested for stealing the tires off a Yugo [wikipedia.org]....

It's just not worth the trouble.

Re:

[andrewd18]

But the distro only contains free and open-source pirates. We can't have any of this proprietary pirate bull crap.

Re:

[zxnos]

umm, what is an appropriate price for a 'shoody ass product'? personally, i wouldnt pay anything for one. i would buy a 'good - excellent' product. and not even consider pirating a shoddy one.

Re:

[Anonymous Coward]

Microsoft was always been weak on piracy prevention. They've always known it helps them to solidify their stranglehold on the market. But they'd rather have the best of both worlds:

Posturing about how piracy is wrong and illegal. Threaten. Remind people of the legal consequences, then drop prices. Most will continue to pirate regardless, some will be frightened into/enticed to buy a legal copy. They srengthen their market dominance AND sell their O/S. Perfect. It's a win-win (pun intended) situation for Mi

It's about money, though. Not no piracy.

[rajafarian]

When will these asshats realize that if they dropped the high cost of their software, that would go a long way to eliminate piracy? I mean, come on, I never too economics in college, but even *I* realize this.

$40,000,000,000.00 billion in the bank says they wouldn't care what your hypotethicial econ text books would say anyway.