Microsoft Reveals Windows 7 Pricing: Same or Cheaper than Vista

As the general release date of Windows 7 draw near—that would be October 22, 2009, for anyone keeping track—speculation had begun mounting about Microsoft’s pricing strategy for Windows 7, with some industry watchers wondering whether Microsoft would use the generally-positive response to Windows 7 pre-releases (and dissatisfaction with Vista) as an excuse to introduce premium pricing. Today, Microsoft revealed retail and upgrade pricing for Windows 7, and the numbers find Microsoft largely holding prices in line with Windows Vista—but a special limited time upgrade program will offer Windows 7 Home Premium for just $49.99 in selected markets, and says folks who buy new PCs with Windows Vista pre-installed before Windows 7 goes on sale will be eligible for free upgrades.

The suggested retail prices for full packaged retail versions of Windows 7 in the United States will be $199.99 for Windows 7 Home Premium, $299.99 for Windows 7 Professional, and $319.99 for Windows 7 Ultimate. The pricing for Windows 7 Home Premium is $40 less than the full retail package price of Windows Vista Home Premium.

Suggested Windows 7 upgrade pricing in the United States will be $199.99 for Windows 7 Home Premium, $199.99 for Windows 7 Home Professional, and $219.99 for Windows 7 Ultimate. The Windows 7 Home Premium upgrade represents about an 8 percent price cut compared to upgrades to Windows Vista Home Premium.

However, in order to lure customers—and encourage people to upgrade to Windows 7 sooner than later—Microsoft is offering two incentive programs. The first will see users in select markets eligible to pre-order upgrades to Windows 7 Home Premium for $49.99 or Windows 7 Professional for $99.99 through retail partners like Amazon.com or Best Buy. Upgrade pricing will be available starting June 26, 2009, and will be available only through July 11 in the U.S. and Canada, or July 5th in Japan or while supplies last. Customers in Germany, France, and the U.K. will be able to order discounted upgrades beginning July 15, with the offer running through August 14 or while supplies last.

Microsoft has also announced its Windows 7 Upgrade Option Program, which begins June 26, 2009: customers who buy a PC with Windows Vista Home Premium, Business, or Ultimate pre-loaded by a participating OEM or retailer will be able to upgrade to the corresponding version of Windows 7 “at little to no cost” through January 30, 2010.

Some of the language surrounding Microsoft’s upgrade incentive programs is a little wishy-washy: we’re not sure how supplies can run out on pre-orders of a product that doesn’t exist yet…we assume this means Microsoft has placed a cap on the number of discounted pre-orders it will accept in a given market. (Microsoft has announced it will be deferring some $200 to $300 million in expected Windows revenue until later quarters as a result of the upgrade programs.) Nonetheless, offering an inexpensive upgrade path and taking a few dollars off the top of the Windows 7 edition most commonly used by consumers may be a great first step towards ensuring the market moved quickly towards Windows 7.