Win 7 upgrade pricing is a missed opportunity

I’m looking at Microsoft’s Win 7 pricing that they’ve announced today and have to wonder what they were thinking. Here’s what we’re looking at.

$119 for Home Premium
$199 for Professional
$219 for Ultimate

Oddly, Microsoft is doing a limited promotion where you can pre-order a “full” copy of Windows for less than the upgrade price. Home Premium is $49 and Pro is $99. Of course, these are only available for a limited time and to limited numbers. Good luck trying to snag a copy :) BTW, the European situation is even more odd, where Microsoft views one dollar as equal to one pound.

The reality of it is Windows 7 is not a major update to Windows. It is Windows Vista done right and what Microsoft customers should have delivered a long time ago. The $49 initial price is nice reward for loyal customers but the “real” upgrade pricing is way off for what the market will likely bear, especially during these economic times. Of course the irony is that most corporate customers won’t pay anything near these prices thanks to things like volume license agreements so it’s small business and the consumer that’s going to get pay the higher costs. My advice, if you really want 7, try to get pre-order before “supplies” run out (Microsoft isn’t saying how many copies they’re making available at this price, perhaps we are seeing the great Windows 7 shortage of 2009).

This is a case where Apple showed the way. Snow Leopard is also not major update but rather an enhanced version of Leopard. With an upgrade price of $29, that’s about where MSFT should be for the Home Premium version of 7. This is a missed opportunity that could have catapulted MSFT into the spotlight. For now, I expect a lot of Windows consumers are going to just stay where they are.

4 responses to “Win 7 upgrade pricing is a missed opportunity

  1. Hi,

    I’ve just read the ZDNet article on this and it suggests that most Apple customers do not qualify and will have to pay over $100’s to upgrade.

    This could be good marketing from Apple, rather than a price drop of $100 per user on their traditional upgrade path.

    I don’t know the answer, however you probably do.

  2. It is actually a brilliant case of supply and demand. Microsoft is fully aware just how fed up people are with Vista and are willing to pay almost any ransom to get a decent experience again.

  3. And yet a large number of manufacturers have signed on to provide “Free Upgrade” coupons to consumers who purchase new PCs between now and the end of January 2010. While the pricing of Win7 is the subject of contention, it sounds like there’s a bigger plan behind it.

    Most people own a single computer for how long? Four years, if they’re lucky? Retail warrantee extensions are usually three years tops, and most of my customers ditch their old toys for the New Shiny after that period anyway, which will likely mean new Win7 computer for the average person within – let’s be pessimistic and say two years, average? I don’t think MSFT will be suffering for lack of licenses within the first twelve months, if that’s the case.

    Also, given the extended public Beta test of Windows 7 (I’m writing this from my Win7 laptop right now) the good press and good user experience is a bonus already realized.

    Could they have priced the upgrades cheaper? Yes, likely. But I expect it’s encouragement to go with a new macine rather than replace the software on an old unit. Unfortunately, the cost of adoption – especially the premiums usually placed on early adoption – is never clear cut as we’d like it.

  4. Just because the RRP is high:

    $119 for Home Premium
    $199 for Professional
    $219 for Ultimate

    Doesnt mean at least after launch that Microsoft wont run promotions to make the deal sweeter like they did with Vista free/discounted Ram, HD, Router etc with upgrade.

    Hopefully we will see some of these offers to tempt Vista users to upgrade… I would buy Windows 7 at $119 if I could get a decent N router or a 1TB external hard drive with it for free.

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