Microsoft drops Vista price to boost sales amid lawsuit

Business Materials 29 February 2008 22:00 (UTC +04:00)

( dpa ) - Microsoft has announced steep price cuts in its Vista operating system in a bid to spur sales of its year-old operating system.

The move, announced late Thursday night, came as the company is facing a troubling class-action lawsuit that alleges it colluded with Intel to market computers as being "Vista-capable" when in fact their specifications did not meet the minimum standards set by Microsoft's experts.

Under the new pricing scheme, Vista Home Premium, the most common version of the software, will drop from 159 dollars to 129 dollars for an upgrade-only version. The top-end Vista Ultimate edition will drop from 399 dollars to 319 dollars.

The discount is primarily aimed to accelerate sales of upgrades to users still running Windows XP or earlier versions of Windows, said Windows Consumer Product Marketing corporate VP Brad Brooks.

Microsoft has sold more than 100 million licenses of Vista since its January 2007 release - but over 90 percent of these were sold as software installed on new computers rather than as upgrades to consumers running Windows XP, the previous version of Microsoft's dominant operating system.

Upgrade rates have been low for several reasons, according to analysts. For most consumer uses Windows XP is largely adequate and often runs quicker and is more stable than Vista. Vista also has much steeper system requirements, which have led to many basic systems running the software poorly.

That issue is currently before the courts in a lawsuit that alleges that Microsoft dropped its official Vista requirements to help Intel sell lower-powered chips for computers in the months leading up to Vista's delayed release.

According to reports Friday, emails presented in court showed that Microsoft lowered its system requirements despite the knowledge of executives that many of the affected computers would not be able to successfully upgrade to Vista.