Microsoft's Ultimate Disadvantage
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Something is missing in many new PCs going on sale this week: Windows Vista Ultimate. |
While new Windows Vista PCs won't be available until Jan. 30, configurations are viewable now.
Dell started taking preorders yesterday. Today, I saw Vista marketing displays and PCs preloaded with Vista at the local Best Buy, Circuit City and CompUSA, not that anyone was buying because nobody was selling. Retailers are just taking preorders.
CompUSA had the biggest Vista marketing displays, by far, but Circuit City had converted every single PC to Windows Vista. I didn't see much difference, in terms of specifications, from the systems on sale last week running Windows XP, most with Media Center Edition. Something else I didn't see is perhaps telling: Windows Vista Ultimate.
At Circuit City, only one notebook on display had Ultimate, an HP model for $2,300. The situation is pretty much the same at the company's online store. The 16 desktops offered there come with Windows Vista Basic or Premium--12 of the latter. Thirty-two of the 40 notebooks come with Premium. Wherever Ultimate is, it isn't much on new PCs sold at Circuit City, or Best Buy and CompUSA.
My opinion of Windows Vista Ultimate is probably well-known at Microsoft, seeing as I've been so loudmouthed about it. I'm convinced that Microsoft's version strategy is way too complicated and that Ultimate costs way too much over what people are used to paying for Windows. Retailers know their customers a lot better than Microsoft.
I had been concerned that retailers would continue their strategy of offering mostly lower-selling SKUs, which would mean strong proliferation of Windows Vista Basic. Sorry, but Windows Basic isn't all that exciting compared to even Windows XP Home. Many low-cost SKUs I observed with Windows Media Center Edition a week ago today had either Windows Basic, which is a big step down in terms of performance and features, or Premium.
Best Buy had the leanest Windows Vista selection of the three stores, which is surprising considering Microsoft CEO Steve Ballmer will be at the New York store on Tuesday morning to celebrate the operating system's widespread availability. I saw three Vista PCs at the local Best Buy. Online, Best Buy offers nine computers, only one with Ultimate, the same HP notebook offered at Circuit City.
CompUSA hadn't converted all its on-display desktops to Windows Vista, as had Circuit City, but there was ample selection. I saw no Ultimate SKUs, which is consistent with CompUSA's online store. There, three of the 13 desktops come with Windows Basic. Among the seven notebook models, CompUSA offers two with Windows Vista Business and four with Premium.
While Ultimate's absence wasn't surprising, I did expect to see it on high-end PCs. A high-end desktop would have the oomph for Windows Vista Ultimate. CompUSA's top bundle could easily handle Ultimate but instead packs Premium: an HP Pavilion m7760 TV Minitower with a 2.13GHz Intel Core 2 Duo processor, 2GB of RAM, a 500GB hard drive and a 22-inch flat-panel monitor, for $1,340 after rebates. Circuit City's most expensive Vista desktop PC was $900 before rebates. Best Buy offered the same HP model as CompUSA for $50 more, but with only a 17-inch monitor.
What about Dell? Dimension desktop PCs come with Windows Basic or Premium, in base configurations. On the high-end XPS systems, where Ultimate would seem a good fit, Dell offers Windows Vista Premium or--get this--Windows XP Media Center Edition. The high-end XPS 700 series systems, ranging in base configurations from $2,000 to $5400, come with XP Media Center as standard fare.
I ended my Ultimate search at Sony, which typically offers the kind of multimedia wonders made for Microsoft's top-end Windows. The VAIO VGN-AR390E notebook, a $3,300 powerhouse, comes with Windows Vista Premium. The similarly priced VAIO Digital Living System VGX-XL3 desktop PC also packs Premium. Where's Ultimate, Sony?
Ultimate isn't just a premium SKU, it comes at a premium price. Dell's pricing is revealing of what OEMs pay (for consumers, the software is $399, or $259 as an upgrade). While Dell doesn't yet offer Windows Vista Ultimate on its top-of-the-line XPS PCs, the software is available on other models for an additional $170. It's not hard math to see how $170 would affect the price on any of the aforementioned configurations.
Merrill Lynch's forecast for PC average selling prices is $767 in 2007, compared with $775 in 2006. Notebook ASP expectations: $1,083 in 2007, down from $1,160 last year. Based on the systems I saw today, I'm skeptical that desktop ASPs will be as high as Merrill Lynch's forecast, which wouldn't bode well for Ultimate. For example, 10 of Circuit City's 16 Vista desktop SKUs sell for under $600.
Microsoft Watch readers, what would you pay for Windows Vista Ultimate, either at retail or extra on a PC, if you could set the price?


Comments (33)
FYI, on HP's web site, Windows Vista Ultimate is a +$120.00 option on their desktop computers.
Posted by JohnJ | January 28, 2007 10:33 PM
JohnJ wrote: "FYI, on HP's web site, Windows Vista Ultimate is a +$120.00 option on their desktop computers."
Thanks, John,
Still hefty, but a big discount off Dell.
Joe
Posted by Joe | January 28, 2007 10:36 PM
I was always under the impression that Ultimate was to be positioned as the Windows Anytime Upgrade choice.
While this whole thing is confusing, Microsoft could go a long way by just discontinuing Vista Home Basic for new PCs and just make it an upgrade for current computers. Make Vista Home Premium and Vista Business for their respective groups. Ultimate is so niche anyways. It's something only enthusiasts would ever want.
Posted by David | January 28, 2007 10:56 PM
"Ultimate is so niche anyways. It's something only enthusiasts would ever want."
I beg to differ. Frankly I think they should do away with Business and replace it with Ultimate.
I'm sure any number of business users would appreciate that. Especially when they'd like to view DVDs on long flights.
As you know ,Ultimate is a combination of the Premium and Business features, with a few extras thrown in.
Yes enthusiasts will want it (that be me) but I can see any number of business users wanting it also.
Right now I run XP Professional and frankly I wish it also had the Media Center stuff as well (although I still prefer XP Pro to Media Center - since I'm forced to choose).
Within a week of this writing, I'll be running Vista Ultimate. Actually, I am right now. It's RC2. But I've got the real deal on order.
Posted by Scott | January 29, 2007 1:53 AM
AFAIK there is no difference in the system requirements for Premium and Ultimate, so your comments about high-end, powerhouse, etc. have no actual bearing on the article but were only thrown in to create an incorrect assumption that you need an expensive PC to run Ultimate.
Putting a slant like that on a journalistic article to only increase page views is very devious.
Posted by ray | January 29, 2007 4:28 AM
Vista Syatem requirements:
http://www.microsoft.com/windows/products/windowsvista/editions/systemrequirements.mspx
Looking at all the online retailers, I have not found a single machine that is not capable of running Vista Premium or Ultimate with a simple memory upgrade.
The only difference would be if you wanted Media Centre functionality, for which you would need to purchase a USB tuner (that can be had for peanuts).
Posted by ray | January 29, 2007 4:39 AM
Some folks would argue that Microsoft just gives a 'teaster' with hidden fees, e.g.
http://www.nigelj.com/blog/2007/01/windows-vista-release/
Acer has even complained about this:
http://www.theregister.co.uk/2006/10/27/acer_slams_vista_home_basic/
Posted by Roy Schestowitz | January 29, 2007 6:10 AM
Ray, please read your posts then read Joe's post again. You two are in agreement. More so your comments on Joe's journalistic skills are off mark.
First and furthermost Joe never said those powerhouses could NOT run Ultimate. To quote him:
"CompUSA's top bundle could easily handle Ultimate but instead packs Premium:" and "On the high-end XPS systems, where Ultimate would seem well suited, Dell offers Windows Vista Premium or--get this--Windows XP Media Center Edition."
He clearly states that those machines CAN handle Ultimate, but they're not packed with it. Then he moves on to Sony "The VAIO VGN-AR390E notebook, a $3,300 powerhouse comes with Windows Vista Premium. The similarly priced VAIO Digital Living System VGX-XL3 desktop PC also packs Premium."
I don't read anywhere that Joe says it CAN'T run Ultimate. He states two things. Those Sony VAIOs are really expensive and they don't pack Ultimate. More so, given his explanation of the $170 buck overhead for Ultimate it is more so reasonable to include it in $3000+ priced PCs. After all if you have three grand you can scoop up 200 more bucks can't you?
So I see Joe having a point here and Microsoft die hards should really listen to him. You might not like it, but he has some good points. In this day and age of rising competition (aside from Microsoft's own XP competition) comments like this might help Microsoft. But all I hear when I read the latest articles from Joe is pure bashing. And "unjournalistic no news" rants. Folks you must realize that Joe's articles are no news and have to be made into questions because Vista isn't out yet! Read that again. Vista isn't out yet and will be out in days, but already past Christmas with a year delay over a two year delay.
I see a whole lot of what looks like shills (did you check out the IE7 problem article by Joe?) trying to cover up all these issues. The points Joe comments should be addressed not shoved under the bed. Vista Ultimate isn't selling in the channel it is most probable to get sales. That is new PCs in stores and online. Instead of addressing this issue all I read are comments of how Joe is unprofessional, how he lies and how all those powerhouses COULD run Ultimate. But guess what Joe knows they CAN run it, but they're not running it. They're not being sold with it even when they could.
Posted by Gerardo Tasistro | January 29, 2007 8:44 AM
it's ridiculous that you can buy a new system capable of running Vista with monitor, printer, and WinXP for the same purchase price as Vista.
no one wants an OS that retails for as much as the entire computer system itself.
and what do you get for that extra functionality? If it's not your first computer, you probably won't find a thing worth that extra cost.
what's even worse, is that I think I'll need Ultimate to sucessfully plug my next new system in at home, assuming I don't want to try 3rd party media center style apps on vista yet... (I do have a domain for play/learning purposes and I like everything on it...)
So for Ultimate, here's what I think would be fair to pay (or rather, what I *would* pay assuming I was gonna pay for something I'm gonna have anyway)
oem: $69
full retail: $99
upgrade: $59
off the top of my head, but that's fair, eh? I know it's not worth more than $99 to me, shouldn't be worth more than that to ANYONE, in any incarnation, not even by one dollar. That means it probably should be sold for $169 - $219. Either way, that's a far cry from $399
Posted by anon | January 29, 2007 9:16 AM
Microsoft's Vista pricing boggles the mind. They don't seem to care one whit about competitive pricing. Ultimate is the full OS from Microsoft. Mac OS X is the full OS from Apple. Ultimate costs $400, OS X costs $130. Does this make any sense? Microsoft is gouging, plain and simple.
Similarly, Novell's SUSE Linux Enterprise Desktop costs $125. And Ubuntu Linux is free. Both are full OSes comparable to Ultimate.
OS X and Linux are industrial-grade, enterprise-level products. But they cost a fraction of Ultimate's price. Seems to me that anyone who pays retail for Ultimate should have the word "Sucker" emblazoned on his forehead.
Posted by Richard Eng | January 29, 2007 9:44 AM
Of course, whether Dell let's you upgrade to Ultimate for $170 or HP for $120, don't forget that you've already paid for Premium on the system, so the actual cost of Ultimate is still much higher than competitive OSes.
Posted by Richard Eng | January 29, 2007 10:21 AM
@Gerardo
I have read Joe's article, but you obviously did not read my post.
There was no reason for Joe to use the words ooomph, powerhouse, high-end, etc. in his article. This is pure sensationalism to increase page views.
I totally agree with him that Vista Ultimate is overpriced and should be the default on the most expensive PCs from retailers (which hides the cost more than the cheaper systems).
My point was that he could write a more coherent and interesting story by sticking to the facts and not sensationalising.
PS: I know what I'm talking about as I used to be a tech writer for computer magazines (won't call myself a journalist as I never had formal training).
Posted by ray | January 29, 2007 10:41 AM
Dear Mr. Wilcox,
I have read this Blog for a while and enjoyed reading both the good and bad about Microsoft and its products.
Since you have become the main editor on the blog, I have not read anything positive or even neutral about Microsoft. Given your reviews, it seems that Microsoft is the great satin and their products are something a person should not purchase.
I have no ties to Microsoft and the majority of the applications I have on my system are not Microsoft products. However; I do run XP SP2 Media Center rollup 2. I find that it provides me with a great experience in managing my media content and sharing it throughout my home with other devices.
I don�t know if I will upgrade to Vista (give that MS has extended the support for XP for five years). However; I do know that your blog cannot help me make a sound decision in purchasing software applications (and that�s a very sad thing).
I for one cannot and will not spend my time reading only everything negative about any company and their products. In order to make my decisions, I will concentrate on those blogs and web sites that present an objective review of products (not a place that just gives a completely negative spin to everything). Later today I will be removing this Blog from my home page and replacing it with something that can help me in product selection.
I don�t want to leave on a negative note � so I hope in the future that you and your site will offer people a positive experience that it once did for me.
Posted by Dan | January 29, 2007 10:52 AM
You should see the pricing of Vista in the UK. Ultimate retail is £299.99 about $587.
Posted by Steve | January 29, 2007 11:00 AM
Ray I did read both your posts as obviously Joe's article. As I understand it you try to establish that Joe wants to "create an incorrect assumption that you need an expensive PC to run Ultimate" (as by your words). I see none of that in Joe's comment. I see Joe trying to establish that those high end PCs are way over the min specs required and thus you would expect to see Ultimate installed.
Finally I don't believe he is sensationalising. He IS sticking to the facts. To MSFTs misfortune he is. He gives stores, computer types, brands and OS types.
PS: What is the relevance of you being a tech writer for a computer magazine? Is this a credentials hop-up trick? Did Windows Vista Ultimate PCs popup at CompUSA just by that sole statement? Did Sony change it's laptop line because of it? Or does that statement in any way change the data presented in Joe's article?
Posted by Gerardo Tasistro | January 29, 2007 11:04 AM
Joe,
Why do you continue to use phrases like this:
"A high-end desktop would have the oomph for Windows Vista Ultimate."
There is no extra "oomph" required for Ultimate over Premium versions of Vista. Do you somehow think adding PC Backup and Restore, Networking Center or Remote Desktop (which people can CHOOSE to run by the way, they are not forced to) somehow can't be handled by a system running Premium?
Time to get of your annoyingly high horse...
Posted by Ryan | January 29, 2007 11:19 AM
Regarding the whole issue of product differentiation (Vista Basic, Premium and Ultimate), we deal with this in real life all the time and don't seem to complain overly much.
The last time I got on a plane, I had the option of going economy class (Vista Basic) with cramped seats and indefferent service, business class (Vista Premium) slightly more space, more entertainment options and friendlier service, or first class (Vista Ultimate) with superior seats and the ultimate in service.
My choice of class was decided by length of journey, amount available to spend and want of comfort. However, I did not remonstrate with airline staff that I was being cheated by having to go in economy class when other people flew in first class.
There is also another reason airlines differentiate seating: it reduces the cost of the lowest class by using subsidies from the business and first class. This enables more people to fly, which fills the planes and makes it more economical to run.
The same can be said of Vista pricing. By offering a range of options Microsoft can have a cheaper option rather than charging a higher price for a single version.
So:
- Vista Basic: $199
- Vista Premium: $239
- Vista Ultimate: $299
Or:
- Vista (1 version): $249
All product pricing is artificial and simply a matter of economics and consumer demand.
Posted by ray | January 29, 2007 11:41 AM
@Gerardo:
I was merely saying that when I made the statement that Joe is sensationalising, I can speak with a little bit of authority because I used to do a similar job to what Joe currently does and know the tricks he uses.
The facts in Joe's article are spot-on, and I am not disputing the facts or even his conclusions, just his writing style, which is more suited to a tabloid than a news organisation.
Just look at the amount of comments and page-views his articles get compared to a non-sensationalist factual news story.
Posted by ray | January 29, 2007 11:58 AM
I don't expect Microsoft to sell very many copies of Ultimate. The price is too high for OEM's to bundle with computers and the anytime upgrade price is also ridiculous. There will be some business owners who find they need the media center; there will be some home premium owners who find they need to join a domain and there will also be a few enthusiasts who simply want bragging rights. In my perfect world there would be 2 SKU's - Home Premium taking over the old XP home price point and Ultimate taking over the old XP Pro price point with a reasonably priced anytime upgrade to go from Home Premium to Ultimate. The media center should not be optional in this day and age. I would also like one license to cover both 32 bit and 64 bit with the ability to switch between them. Of course my perfect world only exists in my dreams.
Posted by Jim | January 29, 2007 12:13 PM
@Richard:
If you compare MacOS X pricing with Vista pricing, you will need to compare the upgrade, rather than the full pricing.
Apple does not offer a full boxed retail product, as you cannot buy MacOS X without having previously purchased an Apple Mac and you cannot purchase a Mac without MacOS X.
Also, Ultimate (comparable to Windows XP MCE)includes a full media centre application which is not available on MacOS X. Once Apple releases an OS with equivalent functionality you can compare its price with Ultimate.
So:
- MacOS X: $129
- Vista Premium Upgrade: $159
not such a big difference.
However, Apple does have a large pricing advantage over Microsoft with its family pack, which is really good value.
Like all other companies, Microsoft and Apple charge an amount for their products that they feel the market will bear without alienating too many customers, while maximizing its profits and undercutting their rivals.
Posted by ray | January 29, 2007 12:30 PM
If anyone is looking at Ultimate for media/DVD experience, I have to suggest that XP with any DVD playing software is much better choice; especially for those who want to play DVD on your flight.
The same Dell laptop I have with XP comes-included DVD software which can easily play 2 DVDs on battery and have better DVD playing performance with lower CPU, compare to Vista's build-in DVD capability. One issue with Vista (ULTIMATE) playing DVD is that the CPU utilitization is so high that I barely ability to play DVD on FULL SCREEN (laptop screen). And just forget about it with the external monitor with 1920x1080 resolution (yes, I tried all the video driver updates already). And the same batteries always last 30% less for me on the same MAX BATTERY settings for a plain installion without manual tuning.
One other minor issue, I think, is device drivers etc; for example, the dock stations. With the same laptop and different DOCKing settings (at work, at home, no dock), XP automatically remember my settings and as soon as I docked the laptop, the display is correctly showing my external monitor on the left or right and all at the previously used resolution. Vista (any version including ULTIMATE) just always switch to lowest resolution and turn off the external monitor (or make it display the same content - not predicable and sometimes just BLACK screen and need to reboot). Vista also forget whether the monitor is left or right of the laptop and it is a pain to adjust the display settings all the time as you are taking the laptop with you in and out of the office and you got a BLACK screen when you open it in a meeting.
I understand it can be my 1 year old laptop that is not up to the spec for Vista (DELL D610 2G RAM, 2G CPU). But it does indicate the years of XP enhancement work have perfected the good old OS to a level that Vista is not yet ready to be.
Posted by Andy | January 29, 2007 12:38 PM
To be completely fair to Microsoft, Vista Home Premium and Ultimate come with programs that are comparable to iLife, which is NOT a part of OS X 10.5, such as the DVD maker and the Movie Maker software. While there is no equivalent to Garage Band nor iWeb (and the Microsoft programs aren't nearly as polished at the Apple ones), at least the higher price from Vista Home Premium is somewhat justified.
Posted by David | January 29, 2007 2:25 PM
Joe, what were you thinking? Ultimate is a niche product for home business users, techies, and DVD enthusiasts. The average Joe (not you!) should purchase Premium or Business. Since the added utilities (BitLocker, Network Center with Active Directory support, DVD in HD, and fancy backup) replace third party products, one would expect the extra $100 retail price. One would never expect OEMs to ship this version on their paper thin margins. You only get that if you really ask for it...at an extra cost. Sounds like you should stick with Vista Basic!
Posted by Bill | January 29, 2007 4:05 PM
Where are you getting this prices? I just got Ultimate through www.ecost.com for $ 199.00
They also have Premium for $ 115.
Posted by Alvin | January 29, 2007 4:15 PM
Thank you. Thank you. For month, I've been trying to figure out why anyone would want Vista Ultimate. Business owners don't want their employees playing with Media Center all day. And home users don't want that bitlocker crap on their hard drives.
Now I get it. Businnessmen who spend long hours on airplanes.
This is a small, but influential, group. I get it.
Posted by roger | January 29, 2007 8:16 PM
Talk about niche.... It doesn't help buyers interested in Ultimate that sellers -- Dell, say -- make it tough to configure a made-to-order machine with the SKU. I've been pricing Dimension E520 systems...when I asked a Dell rep what it would cost to upgrade from Premium to Ultimate, I was told no-can-do. "The Vista Ultimate is only available on the XPS systems and not on the Dimension systems," he/she (BE_Rep_Marius on live chat) said. Way to go.
Posted by Keizer | January 29, 2007 8:18 PM
I think the ultimate aim of Joe is to get rid of Microsoft from this planet.
His comment only based on other sources and he has no hand-on or other approaches to evalute Microsoft product.
Posted by Laker | January 29, 2007 8:55 PM
@ray
I refer you to here.
Mac OS X for $129 is not merely an "upgrade" package but the full package. This means that should your Mac hard drive crash, you can re-install from DVD without requiring a previous version of OS X.
The same cannot be said for Ultimate Upgrade. If your hard drive crashes, you must re-install the previous Windows version before you can apply the Ultimate Upgrade, a royal pain.
Both Ultimate and OS X represent the top tier products of MS and Apple. That OS X doesn't have a media center application is beside the point. You can argue this feature in favour of Ultimate but I, for one, would not use the media center app. I want a home entertainment appliance in my livingroom, not some friggin' PC! (Apple has the right idea with Apple TV.) I suspect this sentiment is shared by most consumers.
My cost analysis stands.
Posted by Richard Eng | January 30, 2007 8:53 AM
@Richard
It is an upgrade from the perspective that you cannot purchase a machine capable of running the operating system that does not already contain a version of that same operating system. AFAIK, you cannot install the OS you have purchased in a virtual machine or any non-Apple PC that you have not already purchased MacOS for.
If you look at the MacOS X Tiger page on store.apple.com (http://store.apple.com/1-800-MY-APPLE/WebObjects/AppleStore.woa/wa/RSLID?mco=405B1455&nplm=MA453Z%2FA), you will see that Apple describes the package as an upgrade.
There is a workaround for the Vista upgrade without a previous OS installed, see http://www.windowsitpro.com/windowspaulthurrott/Article/ArticleID/95011/windowspaulthurrott_95011.html
Regarding the price comparison and functionality between OS X and Vista, you might as well then compare the price of the lowest version of Vista and MacOS X as you do not care for the difference in functionality.
So:
- MacOS X: $129
- Vista Basic Upgrade: $100
For MacOS X there is only one version and that means that everyone has to use this version and pay for all the functionality, regardless of whether they use it or not.
With Vista, you as the consumer can choose whether you need certain features and pay accordingly. If you do not need Media Centre do not buy Ultimate.
When Apple releases MacOS X Leopard with FrontRow, you will have media centre like functionality in your OS, which you will be paying for despite the fact that you expressly do not want it.
BTW, I think MacOS X is great and in many ways surpass Vista and I wish Apple increases its market share, because the PC market needs competition to drive down costs and increase innovation to benefit all of us, regardless of whether you support Microsoft, Apple or the Penguin.
Posted by ray | January 30, 2007 10:11 AM
@Richard
You will find that most people running WinXP or Vista Media Centre do not use the PC in the living room, but rather stream to an extender device (similar to Apple TV), most likely and XBox 360.
Posted by ray | January 30, 2007 10:14 AM
This blog is so very stupid.
We, the readers, are not willing to continue reading this kind of b.s. just to help you gain more no. of visits for you to get a bigger paycheck.
You are so stupid man!
Posted by Herman | January 30, 2007 2:12 PM
Hey guys, the gamers paying $500 to $600 for a video card are going to be happy to pay $250 or thereabouts to upgrade to Vista Ultimate.
Right now I am running Ultimate on a 1.3Ghz P4 with 768MB or RAM. I'm not saying it is a fast machine on this setup. It runs about the same as XP. We are using it to test all of the software we sell. We have had to make some changes because of the wider border on each window and had to upgrade to Install Shield 12 and redo our installs.
Posted by MylesJ | January 30, 2007 6:30 PM
can i install windows vista ultimate on my pc with the following specifications:-
-3.06 ghz p4 ht technology processor
-768 mb ram
Posted by Dhruv | April 7, 2007 1:01 AM