[Infowarrior] - MS cuts Vista prices on horrible retail sales

[Richard Forno]

Microsoft cuts Vista prices to urge upgrades
Friday February 29, 2:43 am ET
http://biz.yahoo.com/rb/080229/microsoft_vista.html?.v=3

SEATTLE (Reuters) - Microsoft Corp (NasdaqGS:MSFT - News) said on Thursday
it plans to cut prices of its Windows Vista operating system sold at retail
outlets in a move aimed at pushing customers to switch to the newest version
of Windows.

The world's largest software maker said it plans to lower retail prices for
Vista in 70 countries later this year in tandem with the shipment of the
first major update to Vista, known as Service Pack 1 (SP1).

Packaged versions of Windows Vista sold at stores and on the Web account for
less than 10 percent of all licenses of the dominant Windows operating
system that sits on more than 90 percent of the world's personal computers.

Most consumers opt to buy a new PC, which comes preloaded with the latest
version of Windows.

"We anticipate these changed will provide greater opportunities ... to sell
more stand-alone copies of Windows," said Brad Brooks, a Microsoft corporate
vice president.

In the United States, Microsoft will reduce prices for Windows Vista
Ultimate, the company's top-end operating system, to $319 from $399 for the
full version and cut the price for an "upgrade" version to $219 from $259
for consumers who already run Windows XP or another edition of Vista.

It also cut prices for upgrade versions of Vista Home Premium, its
mainstream product, to $129 from $159. The price cuts vary by country.

In emerging markets, Microsoft will stop selling "upgrade" versions of
Vista, because, for many customers, it will be the first purchase of a
genuine copy of Windows. The company will instead sell Vista Home Premium
and Home Basic, a stripped-down version, at the upgrade prices.

Microsoft has sold more than 100 million licenses of Vista since its January
2007 release and its adoption has underpinned strong earnings results at the
company in recent quarters.

Nonetheless, some consumers have raised issues with Vista's performance,
stringent hardware requirement and lack of support for other software and
devices like printers. Microsoft said it would continue to sell Windows XP
until June 2008, delaying a scheduled transition to Vista.

Brooks, who oversees consumer marketing of Vista, said he is confident the
company can bring in enough new customers to offset the revenue declines
from lowering prices after seeing the results of a recent three-month
promotional trial of lower Vista prices.

The announcement comes on the heels of sales data that showed a 30 percent
drop in money spent for software at U.S. retailers in January, according to
market research firm NPD.

Microsoft said the announcement is unrelated to the sales data, which the
company said could be a result of inventory build-up after the holiday
shopping season.

(Reporting by Daisuke Wakabayashi, editing by Leslie Gevirtz)