Windows
To drum up demand among people who arent in the market for a new PC, Microsoft also said it is taking limited pre-orders for Windows 7, selling some for as little as $50.
Windows 7 is Microsofts first new operating system in almost three years. With Vista, Microsoft made under-the-hood technical changes that left other software companies and device makers scrambling to make their products work with new computers. Many didnt work at Vistas January 2007 launch; people also complained the new system was sluggish.
Microsoft is promising a smoother launch for Windows 7, in part because its not a radical departure from Vista.
People who have tested near-final versions say Windows 7 boots and runs faster and spends less time nagging the user with alerts and pop-up windows than Vista does. It also tries to make it easier for people to navigate to frequently used Web sites, documents and tasks.
For customers buying new machines, the cost of the Windows software is typically included in the purchase price. The prices announced Thursday are for people who buy Windows separately or upgrade from older versions.
Consumers who buy Windows Vista Home Premium, Business or Ultimate computers starting Friday can contact the PC manufacturer for a free upgrade when Windows 7 becomes available on Oct. 22. Windows Vista Home Basic is not eligible for upgrade. The offer will run through January 2010.
Microsoft will record only about half the revenue it receives from selling those copies of Windows Vista before Windows 7 launches. The rest, about $200 million to $300 million in sales, will be recognized in later quarters, once the upgrades have been distributed or the program ends, whichever comes first.
The Redmond, Wash.-based software maker said it will cost people $120 to upgrade their existing machines to the Windows 7 Home Premium version, $10 less than the comparable Windows Vista upgrade software. Upgrades to the Professional and Ultimate versions will cost $200 and $220 respectively, the same as Vista.
By comparison, Apple Inc. said in early June that upgrades to its newest operating system, called Mac OS X Snow Leopard, will cost $30.
The cost is identical regardless of whether the upgraded machine was running Windows XP or Windows Vista.
Versions meant to be installed from scratch on a computer will cost $200, $300 and $320 for Home Premium, Professional and Ultimate.
Home Premium includes the updated look and feel first introduced with Vista, a new system for home networking, the ability to create DVDs and other features. Professional, the next level up, adds features to support people who might have to work from home or use their computer for work on the road. Ultimate is an everything-but-the-kitchen-sink edition with added data security and other features more commonly requested by big businesses.
Vistas weak reception has prompted Microsoft to extend the life of Windows XP, an older system that is less profitable for the software maker.
This time, to goose early sales and build buzz, Microsoft is cutting the Windows 7 price by about half for people who pre-order upgrade software for Home Premium ($50) and Professional ($100).
The sale will start Friday in the U.S., Canada and Japan, and on July 15 in the U.K., France and Germany. It will last for about two weeks, or as long as allotted copies of the software last.
People can buy the software on Microsofts download site or at retailers including Best Buy Co. Inc., which said it is limiting sales to three per customer.
Microsoft would not say how much it will cost to upgrade from a lesser version of Windows 7 to a more robust one. The company also declined to say what effect Windows 7 prices will have on netbooks, a popular category of small, inexpensive laptops. The low prices are possible in part because they run the older, cheaper Windows XP.