Vista Discount On The Holiday Horizon

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Vista Discount On The Holiday Horizon

By: David Utter
2006-08-22

In order to ease the pain of lost holiday sales due to the delayed release of the Microsoft Vista operating system, Microsoft may provide some advance upgrade discounts during the busy shopping season.

Holding back the debut of Vista may be the best move to ensure the operating system is as stable as possible before dropping it on millions of consumer and business PCs. But the most recent delay pushed Vista's arrival into 2007, a move that has depressed forecasted holiday PC sales and certainly infuriated PC manufacturers.

As a concession for the delays, Microsoft (MSFT) has been considering a strategy of offering discounted upgrades to Vista through its OEM partners. A Bloomberg report on the mostly quiet discussions taking place between the company and its partners noted Microsoft is feeling some pressure to do something to compensate for the delay.

A multi-billion dollar drop in revenue could hit the PC industry as the weather changes and thoughts turn to standing in line at stores or clicking through the pages of online retailers like Amazon.com (AMZN). As one of the companies impacted by Vista's delay, Amazon.com has been encouraging Microsoft to not only decide on a discount, but to decide quickly.

Retailers begin building holiday shopping awareness as early as September, and increase the intensity of their campaigns as the season progresses. Being able to entice shoppers to make a PC purchase this year that they might otherwise delay until 2007 benefits the market.

Microsoft faces an issue that could cause an incentive campaign to backfire. Vista's repeated delays over the past couple of years could reflect issues in the software that may take longer to fix. It is not difficult to imagine the headlines one would see with another delay in 2007, with quotes from people frustrated over paying for a discounted upgrade that has yet to arrive.

That poses a quandary to Microsoft. What if January 2007 rolls around and Vista still isn't ready for prime-time? Release it anyway and fix the bugs on an ongoing basis? They have been accused of doing that with earlier versions of Windows. Or keep it on the sidelines until Vista is as thoroughly tested as possible before sending it into the market, even if that means a few more months of testing?

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Tags: Microsoft, Vista

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