Vista price leak shows it's good to be king

Stan Beer
Tuesday, 29 August 2006 11:31

Opinion and Analysis

The presumably unintentional posting of Windows Vista pricing on Microsoft's Canadian web site (how could Microsoft let that happen?) shows that being in operating systems is a great business if you happen to be the incumbent monopolist.

Without going into specific versions - there are getting to be so many - the Canadian prices start at about US$233 for a basic home edition and go up to US$449 for the bells and whistles Vista Ultimate edition. Of course, US prices can be expected to be slightly lower than in Canada or anywhere else - exactly why, we're not sure.

At a conservative estimate, the number of Windows PCs in the world is due to reach about 1 billion sometime in 2007. This means that Microsoft has a global operating system market of at least US$200 billion all to itself. Not too bad really.

Some analysts contend that people rarely pay the list price for Windows. They either upgrade their existing system at a discount or buy a new machine, where the price is buried in the cost of the computer. Baloney.

Why should we assume that the cost of the operating system is any less than list if we buy it with a computer? A quick call to a friend who is in the PC reseller business confirmed that people are currently paying almost exactly the list price of Windows when they buy any of his or other reseller's PCs with Windows pre-installed.

Sure, if you upgrade your existing box, you'll pay less for Vista. And so you should, since you've already outlaid a small fortune for a previous version of Windows.

Microsoft is going to do some great business over the coming couple of years. It's good to be the king.