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October 24, 2006

Vista upgrade coupons arrive

Posted by David Hunter at 9:35 PM ET.

After months of rumors, Microsoft headed off the receipt of lumps of coal in their holiday stocking from PC manufacturers by unveiling their Vista (and Office 2007) upgrade coupon program:

Microsoft Corp. today announced programs to provide holiday shoppers with low-cost upgrades to Windows Vista™ and the 2007 Microsoft® Office release with the purchase of a new Windows Vista Capable personal computer. Microsoft is working with participating computer manufacturers and system builders that plan to sell PCs loaded with Windows® XP or pre-installed with 2003 Microsoft Office software to make the Express Upgrade to Windows Vista and Microsoft Office Technology Guarantee programs available to consumers and small businesses from Oct. 26, 2006, through March 15, 2007.

Swell, but the problem is that the pesky details are completely variable among the big PC manufacturers:

A number of computer manufacturers worldwide have confirmed plans to participate in the Express Upgrade to Windows Vista program. PCs carrying the Windows Vista Capable logo may be eligible for the program, but upgrade offers will vary among PC makers. The upgrade to Windows Vista may be offered for free or at a discounted price (shipping and handling charges may also apply), and customers should check with PC makers for their specific offers.

Mary Jo Foley reports that a Microsoft spokesman says all the biggies are onboard. As for the smaller PC vendors:

Microsoft will be working with participating smaller PC makers, known as system builders, to provide customers with upgrade discount coupons for Windows Vista with the purchase of a qualifying Windows Vista Capable PC. The offer will vary by region, but in the U.S. upgrades from Windows XP Media Center Edition 2005 to Windows Vista Home Premium, and upgrades from Windows XP Professional, Windows XP Tablet PC Edition and Windows XP Professional x64 Edition to Windows Vista Business and Windows Vista Business 64, will be offered for a nominal fee. Upgrades from Windows XP Home Edition to Windows Vista Home Basic and to Windows Vista Home Premium will be offered at a 50 percent discount from the boxed product upgrade price, plus the cost of shipping and handling.

You buy an XP Home machine and get the opportunity to upgrade it for US$50 to Vista Home Basic which doesn’t even have the Aero GUI.  Such a deal! Jupiter Research’s Joe Wilcox also takes a jaundiced look at the Vista program and finds it potentially perilous for both Microsoft and the vendors. I’ve always been dubious about how enticing an opportunity to upgrade operating systems actually is to the average consumer and wonder if we’ll ever find out how many of the coupons are ever used. We will get to find out how many PC’s get sold this holiday season, though.

Finally, by way of contrast, the Office 2007 upgrade appears to be a marvel of clarity and value:

Microsoft will also enable customers to upgrade to comparable editions of the 2007 Microsoft Office release when they purchase PCs pre-installed with qualifying Microsoft Office 2003 software. For Microsoft Office purchases made through participating computer manufacturers in qualifying locations, customers will receive upgrades to comparable 2007 Microsoft Office release products for the cost of shipping and handling when the product becomes available. For purchases of Microsoft Office through a system builder, customers will need to provide valid proof of purchase and cover shipping and handling costs associated with the upgrade. Customers in North America will receive a coupon with the purchase that must also be submitted.

Hopefully the editions truly are comparable in which case the Office upgrades would be a no-brainer.

Finally, a discussion of coupons would be incomplete without the price tag and Microsoft held a press call today to say that they expect to defer US$1.5B in sales from their fiscal 2Q to fiscal 3Q to cover the coupon tab and product-preshipment, but didn’t expect it to affect full-year results. MSFTextrememakeover provides the requisite spanking and wonders about the timing of this revelation two days before the quarterly earnings report.

Filed under Financial, General Business, Investor Relations, Marketing, Microsoft, OS - Client, Office, Office 2007, Public Relations, Windows Vista

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5 Responses to “Vista upgrade coupons arrive”

  1. Major PC vendors announce their Vista holiday coupon plans -- Microsoft News Tracker Says:

    [...] This week when Microsoft announced their Vista holiday coupon plan, they only gave specifics for the part of the plan that applied to smaller vendors and left it to the major vendors to set their own terms. Some of the majors have done so and the good news is that not all of them followed Microsoft’s lead in hitting up buyers of Windows XP Home machines for more loot for Vista Basic: –Hewlett-Packard Co. spokeswoman Tiffany Smith said people in North America who buy certain HP Pavilion, Compaq Presario and HP Digital Entertainment Center computers equipped with Windows XP, Microsoft’s current version, can upgrade to Vista for free. There may be shipping and handling fees, depending on the retailer. [...]

  2. Wal-Mart starts the holiday shopping frenzy early -- Cool Tech Reviews Says:

    [...] Finally, I have a caveat on buying PC’s this holiday season. The Wal-Mart machine comes with XP Media Center Edition which may well qualify you for a free upgrade to Windows Vista Home Premium, (see also [1]) but there’s no mention of such an offer in the online listing although the machine is the bare minimum “Vista Capable.” If you really plan on upgrading an XP machine bought during the next few months with a coupon, make sure you are getting what you think you are getting. And if the idea of upgrading the operating system fills you with trepidation, then you should wait until Vista actually starts getting preloaded as some commentators are recommending. Posted at 6:28 pm. Filed under Notebook, Companies, Brands, Operating Systems, Bargains, Windows Vista, Laptop, Compaq, Black Friday   [link] [...]

  3. Microsoft 2Q FY07 earnings pregame show -- Microsoft News Tracker Says:

    [...] We’ve previously discussed the Vista coupons and Microsoft’s related scurrying to claim the oddly named ”deferral,” but the real question is how many people are actually going to take Microsoft up on their offer. This revenue may be not just be deferred, it may be nonexistent. [...]

  4. Where’s that Vista effect? -- Microsoft News Tracker Says:

    [...] Finally, speaking of upgrades, the XP users most likely to upgrade are those who bought systems late last year and got Vista Express Upgrade coupons. They have the right hardware and many must have the motivation, but actually getting the upgrades has proved a “Consumer Nightmare“: “I think Microsoft has really lost some of their more ardent supporters on this,” Hughes says. ” I have always been a die-hard Microsoft groupie, but this whole mess has left a very bad taste in my mouth, and I would be more than hesitant to get involved in an upgrade scheme like this again.” [...]

  5. Alice chavez Says:

    I have windows vista which came in my computer in January 2007. For the past several months my computer has been telling me my computer has an outdated program and needs to be updated. Then my port for my mouse stopped working and after trying three times I was forced to go to a wireless. Recently I had to install a new virus protecter. I choose a Windows Live One Care. I thought this would be compatable, now I bunch of errors and programs they say are not compatable. HELP!!!!! By the way I love Vista and hope I won’t have to go to another computer system.

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