Microsoft Slashes Some Windows Vista Prices

Most people buying retail versions of Vista until now primarily have been early adopters or those building their own machines, Brooks said.

Having experimented with lowering the prices on different versions of Vista in different markets, Microsoft believes there is an “opportunity to expand Windows’ reach to other segments of the consumer market over the long term," he said.

Emerging markets will see the “full and upgrade Home Basic and Home Premium versions combined into full versions of these editions,” along with price changes that Brooks said will “meet the demand we see among first-time Windows customers who want more functionality than is available in current Windows XP editions.”

For example, the retail price of Vista Home Premium drops 41 percent to 1,700 South African rand ($224) from 2,912 rand ($384) previously.

But, despite its upbeat stance on Vista, Microsoft was forced last September to give its OEM and retail partners an extra five months in which to continue offering Windows XP on new machines—until June 30, 2008—after receiving complaints that customers were not ready to switch to Vista.

Some analysts have said that the upcoming release of Windows XP SP3 will also slow adoption of the new operating system.

In fact, to Rob Enderle, principal analyst at the Enderle Group, consumers view Vista as "a flawed, incomplete product, containing things they didn't want and nothing they did want, at an excessive price. Fixing that will be really tough." 

But Microsoft’s Brooks said the decision to alter some prices on stand-alone retail editions is “only impacting a small segment of the overall Windows market. But we think it’s important in order to continue growing our consumer business,” he said.