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Analyst: Windows 7 is Still Too Expensive

By - Source: Tom's Hardware US | B 81 comments

NPD analyst says that cheaper than Windows Vista is not cheap enough.

The big news last week was Microsoft announcing the retail pricing of Windows 7. Check out our previous coverage for the pricing details as well as the limited offer of upgrades at less than half price.

We asked you last week what you thought of Windows 7 pricing, and your responses were varied. Understandably, for those who build their own systems, the OEM pricing is most relevant. Others feel that it's too expensive – a sentiment shared by an analyst at the NPD Group.

NPD Group VP of industry analysis Stephen Baker wrote in the company blog last week with his thoughts on Microsoft’s pricing structure. He praised the (mostly) free upgrade program for PCs purchased on or after June 26, 2009, which solves many buying decisions for those who need new computers for back to school, as Windows 7 won’t be out until October 22, 2009.

Baker was less enthusiastic about the retail pricing of Windows 7, however, saying, "Besides the fact that $119 is a price point that fits nowhere in these economic times, it is still way too much for the software. … It is in Microsoft’s best interests to erase all vestiges of Vista from consumers' homes, and by making the upgrade expensive … Microsoft is creating a large disincentive for consumers to move to a far superior platform with a better user experience."

The NPD executive was also puzzled and displeased that Microsoft isn't offering a multiple user license package. He compared it to Apple’s upcoming Snow Leopard OS X software upgrade, which will sell in September for $29 for a single user license and $49 for a family pack that includes five licenses. Baker posed that in times when families have multiple computers in the home, a family pack similar to Apple’s offering is far more consumer-friendly.

What do you think? Even if Microsoft doesn’t change the eventual retail prices for Windows 7, would you be more inclined to upgrade your entire household if such a family pack were offered?

Discuss
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Top Comments
  • 32 Hide
    ryokinshin , June 30, 2009 1:08 PM
    Windows 7 at $50 would make this full circle, the best thing Microsoft has ever done.
  • 18 Hide
    LATTEH , June 30, 2009 1:17 PM
    if it was at 50 for home it would make a lot of people happy
  • 13 Hide
    liquidblue , June 30, 2009 2:27 PM
    If Windows 7 Ultimate was actually 50$, I'd use a legit OS for once.
Other Comments
  • 32 Hide
    ryokinshin , June 30, 2009 1:08 PM
    Windows 7 at $50 would make this full circle, the best thing Microsoft has ever done.
  • 18 Hide
    LATTEH , June 30, 2009 1:17 PM
    if it was at 50 for home it would make a lot of people happy
  • 5 Hide
    kojakk , June 30, 2009 1:21 PM
    I'm disappointed that 7 Ultimate doesn't have a pre-order discount. I purchased Vista Ultimate less than 6 months ago, and while I'd really like to upgrade to 7 I don't want to have to do a full install if I downgrade to Professional, and I'm definitely not spending another $200 for 7 Ultimate.
  • 1 Hide
    viometrix , June 30, 2009 1:25 PM
    i have been on windows vista since alpha...they runied what couldve been a great os...the alpha was perfect...then microsoft added the bloat....as for vista being great, it is now even though still a resource hog....but people forget the many many months of constant bluescreens we endured at first, even on vista designed hardware.

    so yes micrsoft should sell windows 7 at a fair price for the economy and as a way to say im sorry for messing with you all with something worse than windows me....as far as a family pack, never would happen in my home...i buy one copy and call it in if i need to...i have 5 computers in my home.... 3 of wich will run windows 7...the same copy... leave one as vista/ xp.... the other is my linux box....

    but again after all the money people spent on vista...that should be considered into the price if they want everyone to upgrade.....
  • -4 Hide
    thejerk , June 30, 2009 1:26 PM
    I would release two versions, like XP : Home and Professional.

    I'd make Home $99 and Professional $199, and allow up to 4 activations, each. If you only have two computers at home, you already know at least two other people who want an upgrade. You could even charge those people the $20 or $40 and make your money back. Think about it, you could actually do something positive, and reduce piracy... even if just a little bit.
  • 2 Hide
    mikepaul , June 30, 2009 1:27 PM
    Apple sells the hardware too, so a smaller profit on the software is OK. Comparing to Microsoft's position is less than useful.

    I'm getting one discounted Professional upgrade, and then someday if XP stops running on my old Compaq I'll figure out if it's worth trying to upgrade...
  • -1 Hide
    thejerk , June 30, 2009 1:27 PM
    I suppose I was using the new math. I meant the $25 or $50, respectively, above.
  • 7 Hide
    sublifer , June 30, 2009 1:42 PM
    $50 for a retail box edition (not the upgrade edition) would be nice. If they really want to cut piracy and dominate the market, that's how you'd do it. They should create an add-on software store similar to the iTunes app-store and try to make back some money there... at least that way it would be optional. Most people wouldn't even mind paying $0.99 - 5.99 for a piece of cheap software, they could even sell calculator and MS paint this way instead of including all the little freebie apps.
  • 4 Hide
    Onus , June 30, 2009 1:42 PM
    I'd like to see the lower prices, sure. I think it is unlikely I'll upgrade my wife's PC or my laptop to Win7 unless the price is a lot lower or there's a "family pack" deal.
  • 7 Hide
    erichlund , June 30, 2009 1:43 PM
    The example used is not a good one. Apple can sell its OS cheap, because you must, according to the license, buy their premium priced hardware to use it. Microsoft doesn't make any money on the hardware, so they have to make their profit on the software.
  • 2 Hide
    Bullheaded67 , June 30, 2009 1:55 PM
    I would agree that for the average home user a family pack would be a nice product to have on the market. For the savy computer user there is Technet.
  • 3 Hide
    tayb , June 30, 2009 2:00 PM
    The half price sale they are having right now should be the regular retail price and Windows Ultimate is way overpriced regardless of a sale or not. Microsoft promised Ultimate features for Vista and they never happened. Anyone running a legitimate copy of Vista Ultimate should definitely get a big rebate for Windows 7 Ultimate. There should be no operating system more than $100.
  • 0 Hide
    theuerkorn , June 30, 2009 2:03 PM
    Of course we all want the most for our money and free is certainly perfect. Nevertheless, Microsoft is in business to make money and they have all the reason to charge as much as they can ... they're still a monopoly of sorts. Regardless, Vista pricing was outrageous and the pre-sale pricing for 7 is quite reasonable. Yet, once it goes back to $120 (from $50) it's once again an expression of their status in the market, and not much we can do about it. So lets enjoy the pre-sale or switch systems.
  • 0 Hide
    waikano , June 30, 2009 2:03 PM
    Baker has it right.....Micro needs to change the price structure, hard economic times or not. A 5 user affordable license would be great, call it whatever. And you Micro fanboys need to get off it when someone compares Micro to Apple it's going to happen. They are the top 2 OSs in the Market and even though Micro is installed on Most PCs doesn't mean they are the Only Thing going. If they had any more market share they would be a monopoly and Pricing their OS as it is would be highway robbery.
  • 2 Hide
    AdamB5000 , June 30, 2009 2:10 PM
    I like the idea behind multiple licenses for a discounted amount. I'd be more apt to buy the Home Premium for $149 (for example) with five licenses than I would a single user for $79.
  • 0 Hide
    scook9 , June 30, 2009 2:15 PM
    I know it will never happen, but i still think that all the Vista user should get a severe discount on a full retail (not upgrade) license to Windows 7. Just let Microsoft work it out so that you cannot have both the Vista and Windows 7 activated at the same time. Give us something for being the Windows 7 Beta for 3 years well using Vista.
  • 0 Hide
    Anonymous , June 30, 2009 2:20 PM
    Microsoft,
    I beg you, follow the same $30 for a single license and $50 for a family pack (as Apple does) with no gotchas for every version of Windows 7 and not as an upgrade, I'm talking about the full blown price.

    And please please please, one single version in the future. Hell, it's still not too late to release a single version like Ultimate 32bit/64bit.

    I say go one step further. Start blitzing mail/newspapers/point of sale counters with media of Windows 7 Ultimate in the minimalist packaging. Hand them out for free and then charge for a key online after a 30/60/90/whatever trial at the above mentioned pricing scheme. Not as a promotion! As a permanent price point.

    Are you saying you won't match Apple in the one thing they are actually price friendly with?????

    You can do this! People need/want this at this price. Let this be the year that Microsoft gets incredi-buzz on something positive like this. This can be truly historically positive.
  • 0 Hide
    brendano257 , June 30, 2009 2:26 PM
    Well....I'll be damned if they drop the prices that much. But if you look at it like this: If you buy a Mac for about $1000 you get about a $600-700 Windows machine. But pay for Vista Ultimate (comparing FULL featured OS) and your up at the $1050 mark, same as Apple's offering. Very estimated of course, but you see where the difference is, but Vista/7 REALLY should be much cheaper. And then there's all the nice things that come with Mac, like just working, but that is hopefully coming with Win7 =D
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