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October 27, 2006 7:09 AM PDT

Acer: Vista is an excuse for Microsoft price increases

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Microsoft is raising the price of its software as it prepares to launch Vista, according to one of the leading PC manufacturers, Acer.

According to Jim Wong, senior corporate vice president of the Taiwan-based company, the issue is simply that the basic home edition of Vista, Home Basic, which is available for preorder on Amazon.co.uk for 154.99 pounds ($293), is so basic that users will be forced to move to Vista Home Premium, at 189.99 pounds ($359). A Home Edition of Windows XP is currently available for 165.99 pounds, but has a recommended retail price of 176.99 pounds.

"The new (Vista) experience you hear of, if you get Basic, you won't feel it at all," Wong told PC Pro magazine. "There's no (Aero) graphics, no Media Center, no remote control."

Wong also said that the manufacturer's license for Vista Home Premium is 10 percent more expensive than for XP Home. "We have to pay more but users are not going to pay more," Wong said. This would mean an increase in the cost to PC manufacturers of 1 percent to 2 percent, according to Wong, in a business where the profit margin is around 5 percent or less.

At the top of the Vista lineup is the Ultimate Edition, which can be preordered for 325 pounds ($614) and, again, is significantly more expensive than the XP operating system it replaces. Windows XP Professional with Service Pack 2 has a recommended retail price of 289.99 pounds ($550), but is currently available for 234 pounds ($444).

Colin Barker of ZDNet UK reported from London.

See more CNET content tagged:
Acer Inc., Microsoft Windows Vista, PC company, Microsoft Windows XP, Microsoft Corp.

Add a Comment (Log in or register) 111 comments (Showing first 20 comments)
tap... tap... tap...
by CentrOS October 27, 2006 7:47 AM PDT
The sound of the nails being driven into Microsoft's coffin.
Reply to this comment View all 2 replies
And you want what?
by Vegaman_Dan October 27, 2006 7:49 AM PDT
There is a starter version that doens't have Aero, Glass, or Remote Control in it. Well hey, I've been working with Vista now for over a year now in the various beta forms and I turn all those features off, I would be rather upset if I was forced to buy a higher grade version that included features I was going to disable anyways.

I'm glad they offer a lower version so I don't have to pay for features I'm not going to use anyways. That's forethought in offering products at different levels.
Reply to this comment
XP Ultimate?
by roger.d.miller October 27, 2006 7:53 AM PDT
There is no XP Ultimate. So how can you compare prices? This is nonsense.
Reply to this comment View reply
Price Hikes?
by dwerth October 27, 2006 7:58 AM PDT
Ya think?!?!?
Reply to this comment View reply
Offer two
by DraconumPB October 27, 2006 8:17 AM PDT
PC OEMs should do the following:

Continue offering XP for awhile. Not everybody even wants Vista (there are some incompatibilites and the like that some people might not want to deal with). Also, obviously XP is going to be cheaper considering that it's a 5-year-old OS. Some people are OK with that. It's not like when Win was versioned by the year and people felt out of date to be running 95 in the year 1998 ('cause 98 was out).

XP is perfectly proficient as an OS if you ask me... especially when its kept up to date.

So OEMs shouldn't complain about prices rising for the new OS because all they have to do is offer a cheaper PC with XP on it in addition to the more expensive PC loaded with Vista. Consumers will still want it because the price difference will be cheaper than buying the OS on its own.
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I think Vista will be a failure
by i_am_still_wade October 27, 2006 8:28 AM PDT
Microsoft isn't going away. But people aren't going to flock in droves to Vista like Microsoft predicts. I believe Vista will go down as Microsoft's biggest flop since Windows ME.

I've tested it. It is annoying. Some essential features are hidden, like the "run" command on the start menu. Instead of relegating all users to limited accounts and leaving the administrator account for system modification, like Linux, everyone is an limited Administrator. You try to do anything, and you get a pop-up box. Try again in one minute, same box. Do you want to log in as an Administrator to do these things easily? You have to go through 100 restarts and through complex security measures.

Microsoft has the right idea on security. They just did it all wrong, and caved in to inferior antivirus programs.

Don't get me started on the DRM.

In reality, Vista is like a mausoleum. It looks good, but its dead inside.
Reply to this comment
Time for Linux....or Mac even
by LarryLo October 27, 2006 8:36 AM PDT
I have built my own computers for 10 years always buying OEM Windows. I am not planning on buying Vista, its too expensive, to restrictive and frankly I don't see what the real benefits are.

I have already started putzing around with Linux (ubuntu and Centos) just to get my feet wet(its not been that easy). I think by end of next year when its time for my next hardware upgrade, it will be a PC running Linux or maybe a Mac book pro. M$ ridiculous pricing and product lines have seen the last of my money.
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Alternatives to the MS Gouging
by bigpicture October 27, 2006 8:37 AM PDT
Ubuntu is free, and it can only get better, for those who don't want to pay the MS extortion tax.
Reply to this comment View all 2 replies
Another slanted CNet article
by smilin:) October 27, 2006 8:44 AM PDT
XP came out like 4 years ago. The inflation rate has been what 3% every year? (roughly 12% overall inflation since then, not counting inflation on inflation).

Now MS has introduced a 'bigger better faster' product and increased the cost of it by LESS than the rate of inflation?

Everyone gets a free ticket when it comes to bashing Microsoft. Logic and Facts are simply not required. Just FUD away and as long as your target is MS you get a free pass. Don't try this with Apple or *Nix... the zealots will hang you!
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Move to Linux.
by System Tyrant October 27, 2006 8:44 AM PDT
If PC companies are tired of Windows and Microsoft's high prices then maybe they should look at offering Linux as an alternative.

It's kind of tiering to keep hearing people complain about the cost and security of Windows and Office and yet they make zero attempt to do anything about it. Why should Microsoft lower their prices or change anything about Windows when everybody keeps selling it and nothing else.

If Acer and other PC makers want to get Microsoft attention then maybe they should start selling and promoting an alternative to Windows. If not then shut up and do what you have to do.
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Who do they think we are?
by ppgreat October 27, 2006 8:58 AM PDT
Why would you go out and spend the equivalent of, in some
instances, half the cost of your PC for these features?

First of all, some marketing dweeb has made a huge mistake in
trotting out 5 different versions (see 'Why Can't Microsoft
Simplify?' at www.stonethembas.com).

Secondly, they are charging premium prices to consumers and
enterprises for their inefficiency in bringing products to market
?even after ripping out major features that they told these
customers to just hang in there and wait for.

Is there really anything you do in Vista that can't be done right
now in XP?

User experience? Your mileage will vary after you take the time
to learn the new setups.

Security? Just keep XP properly updated and use some common
sense on what you download and where you visit.

Search and organization? Download search applications for free.
Keep your folders in order.

Internet Explorer 7? Runs in XP. And you can stay ahead of the
browser wars with Firefox 2 anyways.

Sidebar and Gadgets? Chews up screen real estate without really
providing a whole lot of info. Again, some enterprising soul will
come out with a freeware version soon.

Performance? Are the majority of users really suffering with
email, internet and Office performance under XP?

Windows backup? You have free apps or network admins taking
care of this already.

Networking? You're paying hundreds extra for a summary map?

Sideshow? A feature in search of a market?

Speech recognition? Again, there are apps out there for XP.

Help and feedback? Already there in XP.

Windows update? Nothing new to see here.

Aero? There are plenty of theme products out there you can play
with to make XP look better. And I have no doubt some
enterprising soul will come up with an Aero theme.

To paraphrase Clara Peller: "Microsoft, where's the beef?"

I hate to make the platform comparisons, but Linux and Mac OS
X are ahead of the game here. Even if you're a devout MS person
at home, I don't think you can any longer make the excuse at an
enterprise level that you don't need to investigate other OSes to
remain competitive and cost effective.
Reply to this comment View all 2 replies
Wow
by ss_Whiplash October 27, 2006 9:02 AM PDT
I don't understand how a company who sells more software than anyone on the planet can also charge more than anyone on the planet. Oh wait... MONOPOLY.

Yes it's time to move to Mac OSX. In fact, I did just last month. I'm happy as a clam with my UNIX base, and my family is digging the ease of use of the UI.

Linux still has a way to go to be useable for the average joe, but distros like Ubuntu and getting slicker every day.

Hopefully people will start to move and we'll have real competition once again.
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Acer's REAL Problem
by john55440 October 27, 2006 9:09 AM PDT
A Reuter's article states "Although sales of computers and consumer gadgets typically grow faster in the run-up to the Christmas shopping season, Acer said fourth-quarter profit was expected to be flat with the third quarter amid falling selling prices."

Yup, Microsoft should immediately slash their Vista prices, so Acer can increase their profits.:-)
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Same old User Comments
by Swalters1 October 27, 2006 9:47 AM PDT
Microsoft is offering a new product, completely redesigned, updated, more secure and with more features (above Basic level) and everyone wants it to cost the same as the old version? What economics school did these guys go to?

That's about as logical as saying the new Camery Hybrid should cost the same that it did 6 years ago.. oh wait it wasn't out 6 years ago... hmm okay then it should cost the same as the old gasoline Camery... 6 years ago... yeah right.

Could we please keep the exagerations to a minimum:

a) This isn't the end of Microsoft. It's the next generation, and in two years it will be the standard for the industry and the home user.

b) Alternative OS's just don't cut it. Sorry Linux, I love my penguin, but the reality is, it's too hard for the day to day user to manage, and IT departments don't like mixing OS platforms on a large scale, when they buy new PC's they will have Vista on them.

C) MAC, not a bad alternative, unless you're a gamer.. then well.. I hope you're wiling to pay the extra $450 for the MAC that's as powerful as your PC, and then spend the addtional $299 to $649 for a PS3. Face it, MAC has a long way to go to truly be the PC of choice for most Gamers... and yes there's a lot of them out there. (regardless of what commercials say, my PC has been virus free for years, never gets spyware, and I edit videos, transcode, do graphics (both vector and raster) and do it all faster than my Aunt's G5, which means my PC could beat up your MAC...

D) Keep XP. Probably a good idea for people with low-mid to low-end PC's, you wont' get much out of the new OS anyway (Requires 512MB of RAM and Reccomended is 1GB, unless you gamer then it's 2GB)

Relatity is: 1: People Hate Change 2: People Hate the Winner, unless it's them. 3: Microsoft is the Big Scary Corporation Bad Guy and we all love to beat up on them. 4: In 2 years you'll be complaining that Vista needs to be updated because it's been two years since the last time you got ot complain about changes Microsoft made.
Reply to this comment View all 6 replies
Is the UK more expensive than USA?
by AgeOfPenguins_com October 27, 2006 10:00 AM PDT
Because even going by the "equivalent price" in US dollars, Windows XP Home (etc) are WAY more expensive in Britain than at my local Best Buy.

As far as I know, Windows XP Home is US $179, and you can get it OEM for about $90.
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Cry me a river. I'm not buying it.
by eBob1 October 27, 2006 11:00 AM PDT
So, the cost of Windows Vista will be too high to make a thousand dollars profit on a high-end laptop? No one said you had to pre-load Windows on the laptop to begin with. I, for one, would prefer that you didn't. I could do without the crappy trialware and other nonsense that gets pre-loaded. Not only that, but these seem to be retail box prices. Usually the OEM versions are significantly less.
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I don't know what the big deal is...
by fourpastmidnight October 27, 2006 11:17 AM PDT
I don't know what the big deal is. So raise computer prices by the 1%-2% to make up for the added cost. It is a new OS with new features (e.g. a completely redesigned GUI, Indigo, program interfacing via .NET more so than the traditional Win32 API (hehe...is Win32 even an accurate term anymore??), etc.). Afterall, I did the calculations and Vista is not that much higher priced than XP. In relation to current pricing of XP, it is well within what could be termed a "reasonable" price increase (not that MS Windows OSes are reasonably priced....).

In any event, if you don't want to pay for Vista, then goto Linux. That's what I'm doing. I'm tired of big brother and want control of my hardware and software back.

The best way to get MS where it hurts is to switch to FOSS. Is it a perfect solution? No. But if we continue to keep buying MS products, what motivation is there for MS or any other software company to change their licensing and/or priceing models?
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Hey Acer: Stop Selling Windows PCs
by Mister Winky October 27, 2006 12:40 PM PDT
I have the solution: Acer can really stick it to Microsoft by no longer selling Windows PCs. They can call Apple and see if they might consider licensing OS X to them. Or better yet, they can just sell PCs pre-loaded with SUSE Linux! yeah, that'll show big, bad Microsoft who's boss!

As Acer knows, people don't buy new PCs because they want a new OS and new software pre-loaded on a new PC, everyone just wants the latest, greatest Acer because Acers rawk!!! I'm sure Vista wouldn't have driven Acer's PC sales anyhow, so it's no loss for Acer, right? Microsoft is only a liability to Acer, right?

Acer: get a grip. Without Windows, you would have no customers. PCs are so overly fast for what most people do today and so commoditized by mass production that we should expect the hardware component of a new PC to make up a smaller percentage of the overall sales price. Software provides the functionality, the marketing vehicle and the value of a new PC. The hardware is just there to run the software.

-Mister Winky
Reply to this comment
Acer is still in business??!!
by explorer5 October 27, 2006 12:57 PM PDT
Wow! I thought they shut down years ago - sounds like its only a ploy to get their name in front of consumers so people will actually buy their systems!
From this article, it sounds like Acer doesnt realize that since they are a manufacturer they are able to get volume discounts for windows.. Dell pays somethin like 10 or 15 bucks for a copy of windows...
Just a marketing ploy, makes Acer look bad. No one cares that the new version of windows that is sold with their PC is 40 bucks more than the old one - the costs of the OS was never broken down for the customer anyway.. Whats the big deal?? Sheesh!
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Vista Pricing
by thedreaming October 27, 2006 1:34 PM PDT
I think the pricing on vista is out of hand. Do they really think the average person is going to fork over hundreds of dollars for an OS that does the same thing their current copy of XP can and the only thing that the new OS has is that it's prettier? A pretty, eye candy filled OS isn't worth the price they are asking.
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