Windows 7 to be cheaper than Vista

Echoing a companywide theme of affordability, Microsoft said Thursday that Windows 7 will be cheaper than the last version of its trademark operating system.

Retail prices for Windows 7 when it rolls out Oct. 22 will range from $119.99 to $319.99. The price points are 10 percent lower than Windows Vista, the version of Windows that 7 will replace.

From today through July 11, Microsoft is running a half-off special, with Windows XP and Vista users able to pre-order the new operating system for as little as $49.99.

"For first time we will have some aggressive offers that customers can take advantage of," said Tami Reller, chief financial officer of the Windows group in a conference call Thursday.

Anyone buying a new computer that comes installed with Windows Vista starting today will qualify for a free upgrade to Windows 7. "There's sort of this continuing trend with Windows 7 of removing any potential barriers to getting people to upgrade," said Michael Cherry, an analyst at independent firm Directions on Microsoft in Kirkland. "The pricing just seems to follow that pattern."

As the economy remains stalled, Microsoft has capitalized on the penny-pinching zeitgeist with several campaigns. Earlier this year, the company released a barrage of television commercials featuring shoppers hunting for a laptop that cost less than $1,000, chiding Apple computers of being expensive.

In addition, a recent online-video ad campaign for Microsoft's portable music player Zune says it would cost $30,000 to fill a rival Apple iPod with music.

Even Chief Executive Steve Ballmer has been pitching Microsoft's technology internationally as an investment to help companies squeeze more juice out of limited resources.

The Windows 7 pricing released Thursday applies only to boxed copies. Most copies of Windows are sold installed on new computers, and the computer makers pay Microsoft per copy. Microsoft does not disclose how much it charges computer makers.

The company also plans sell a simpler, less expensive version of operating system called Windows 7 Starter to computer makers that build netbooks, small laptops that cost about $300. Another less-expensive version of the operating system, Windows 7 Home Basic, will be sold only in developing markets.

Executives have been calling Windows 7 everything Vista was supposed to be. Vista, which began selling in 2007, had numerous technical problems when it first hit the market and quickly became the target of derision in Apple's "I'm a Mac, I'm a PC" television ads.

Early reviews say Windows 7 is smoother-running and easier to use. Several features are aimed at making it easier to manage having several windows and applications open at once, including pop-up preview screens. The operating system allows a user to clear everything off the screen by jiggling a mouse.

Windows 7 reduces the number of steps needed to share music, photos and other files across a home network. It also includes more touch-screen features.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com