Microsoft will next month revise its Office for Mac product line with
across-the-board price cuts and two new editions of Office, sources
said.

In an effort to broaden Mac Office's customer base, Microsoft
will ship a "Student and Teacher" version as well as a Professional
release that includes Virtual PC.

The company told channel partners last week that it plans to announce
the changes August 12.

Office v.X Professional Edition will ship with the traditional suite of
OS X applications — Word, Excel, PowerPoint and Entourage — as well
as Virtual PC, which Microsoft href="http://www.eweek.com/article2/0,3959,894813,00.asp">acquired
from Connectix Corporation in February. The company told dealers that
the Professional Edition will ship with Version 6.1 of Virtual PC with
Windows XP Professional. The new version will be priced at $499 with a
$329 upgrade.

Separate from Office, Microsoft reportedly plans to begin marketing
Virtual PC under the Microsoft brand in August. The company told
resellers that it will ship a standalone version of Virtual PC for Mac
6.1, but that it's "strictly a rebrand release" with no new features as
compared to Version 6.0. Instead, Microsoft will revise the packaging,
copyright information, and support details.

The second new Office release will be Office v.X Student and Teacher
Edition, priced at $149. This release will reportedly replace the
current Academic Edition of Office, providing an affordable version of
the full Office suite to the education market. This edition of Office
will also include an installation license for up to three Macs in a
household.

Microsoft told resellers that the new version won't change the
company's existing academic licensing plans. However, it may be a more
public release than past versions targeted at education. While dealers
were restricted from displaying past academic editions on store
shelves, Microsoft told retailers that the Student and Teacher Edition
will have no such restrictions.

The company won't offer an upgrade version of the Student and Teacher
Edition, but buyers will be eligible to purchase Office upgrades in the
future.

To prevent confusion, the current release of Office for Mac will be
branded as Office v.X Standard Edition, and will drop in price from
$499 to $399, while the upgrade price will drop from $299 to $239. The
standalone releases of Word, Excel and PowerPoint will drop in price
from $399 to $229, while Microsoft will cut their upgrade prices from
$149 to $109. The standalone version of Entourage will remain at $99.

Microsoft told dealers it hopes the revised product line will open up
opportunities for marketing Office to new customers. The company also
said that research shows that PC compatibility is a key purchasing
factor for Office customers, so Microsoft plans to emphasize
compatibility in its Mac marketing. Resellers said that several of
Microsoft's Mac Office taglines use the phrase "complete
compatibility," and that the new marketing text includes a prominent
mention of PC interoperability.

A representative for Redmond, Wash.-based Microsoft declined to comment.