Microsoft 7's $30 Price Heralds Microsoft's Hard Fall Push
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Microsoft's latest Windows 7-related price cut - eligible college students can purchase a copy of the upcoming operating system for $30 - suggests (at least to me) that Redmond intends to take a bite out of Apple's traditionally strong presence in the educational sphere. Apple's choice of Aug. 28 as the day to release the latest update to its operating system, Snow Leopard, seemed like a shrewd bit of timing to take advantage of back-to-school shopping. That strategy may have paid off; according to a Sept. 17 research note from the NPD Group, Snow Leopard outsold the original Leopard OS by a 2-to-1 margin, and Apple's Tiger OS by 4-to-1, during its first two weeks of release. Snow Leopard also sells for $29 to Leopard OS X users. Let's roll those factoids around in the collective mouth for a moment. To me, Microsoft's latest move tastes like an attempt to swipe at Apple and Snow Leopard in a traditional stronghold for Mac products, i.e. the college dorm-room. Why else set a base price for Windows 7 so close to that of Steve Jobs' new baby, if not to take a little retaliatory swipe? The price for Windows 7 seems to be diving for everyone. Amazon.com doesn't seem to be offering a discount today for the consumer version, but wait a few weeks and that might very well change; certainly other online retailers haven't been shy about offering price cuts. As for the enterprise, well...since when has an IT procurement specialist, buying in bulk for hundreds of PCs, ever had to pay sticker price? Actually, no, wait, I'm sure that last thing happens more often than the nation's CFOs would like, but you see my point - between those examples, and this school-related cut (a version of which is also being offered in the U.K.), it seems like Microsoft's more than willing to take margin cuts in order to disseminate Windows 7 as rapidly as possible through all possible segments. Microsoft CEO Steve Ballmer likes to insist that Apple doesn't represent a genuine competitive threat - during this summer's annual Financial Analyst Meeting, he made a point of saying that, "Apple's share, globally, cost us nothing." Even if Microsoft doesn't feel as if its existence is directly threatened by the tastefully designed devices rolling out of Cupertino, though, it probably wouldn't mind taking a little mind-share among a younger demographic while selling a few more copies of Windows 7. Stephen Baker, vice president of industry analysis at NPD, mentioned Windows 7 in a statement about Snow Leopard's sales: "As we head into the fall selling season, and the release of another OS upgrade, it will be instructive to see if that upgrade - currently projected to sell at ASPs [average selling prices] much higher than Snow Leopard - can deliver the same incremental increase in consumer demand that Snow Leopard has enjoyed." Microsoft hopes so. |

