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Aussies pay top dollar for Windows 7

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Louisa Hearn

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This time it works: Microsoft

Microsoft use people power to launch Windows 7 and are certain that 'it works.'

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Australian customers will have to stump up almost double the US price for some versions of Microsoft's new Windows 7 operating system that arrived in Australian stores yesterday.

The company cited taxes, freight costs and currency fluctuations as key reasons that the retail price for full and upgrade versions of its software were substantially higher than in the US.

"We see the same questions being asked about most consumer electronics products," David McLean, Microsoft's regional director of entertainment and devices, said.

Screen shot of Windows 7 library feature. Click for more photos

Windows 7 launch

Microsoft has rolled out its new operating system in Sydney. 

"We are priced very similarly to the rest of the category. Is it parity? Probably not. It is a business decision we have made and we think it is equitable in this market."

The most basic version of the software will cost $199 to upgrade here compared with $US119 ($129) in the US, but, at the top end of the range, Australian customers must pay $429 to upgrade to the Ultimate version, almost double the $US219.99 ($238) price tag.

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David Flynn: Should you buy Windows 7?
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"Retailers operate with much tighter margins in the US than Australia. That is a fact. Taxes in this market are very different to Australia. That is a fact. We are a large country and we need to freight products from overseas and that is a fact. These things do affect pricing in this market," McLean said.

However Choice spokeswoman Elise Davidson disagreed that these costs could mount up so substantially.

"Australians don't mind paying a little bit more for reasons such as the size of our market, our large land mass and delivery costs. People understand this and accept it. But when you're looking at almost double the cost of what you can buy in other markets, even taking taxes into account, we are being ripped off.

"We looked at this with Vista as well and Choice doesn't think this price discrimination is fair for Australian consumers," she said.

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More coverage: Windows 7 launch centre
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Despite recent shifts in the exchange rate, Australian wallets are also being hammered in electronics shops where exorbitant pricing persists for consumer electronics goods. This week, CommSec chief economist Craig James recommended sourcing new tech gadgets and other items overseas instead of waiting for local retailers to react to the soaring Australian dollar and lower the price of products.

However Davidson warned that software companies such as Microsoft were able to use technology to stop Australians from getting a better deal by banning international IP addresses and credit card numbers from internet sales.

Microsoft said it expected Australian retailers to set their own competitive pricing for the software with bundles and deals to suit a wide range of users.

"We set [the] base price, trying to provide stability for the ecosystem, but the price ends up being the margin position the retailer wants to take," Jeff Putt, Windows consumer lead at Microsoft Australia, said.

Microsoft is offering a free upgrade of Windows 7 to anyone who bought a Vista PC from the end of June to the end of January. Some experts have suggested that other Vista and XP users wait until they buy a new PC before embracing the platform. Davidson predicted that the high cost of upgrades would prevent many users from adopting Windows 7.

"We expect that, apart from those who remain dissatisfied with Vista, most will be simply waiting until they upgrade their own computers before bothering to get the new operating system from Microsoft," she said.

Stephen Baker, a consumer analyst for NPD Group in the US expressed his disapproval in June at the way Microsoft had priced upgrades, given the general level of dissatisfaction with Vista.

"I am mightily disappointed in a couple of aspects of Microsoft's upgrade plans for non-PC buyers. First is the pricing on the Windows 7 Home Premium upgrade. Besides the fact that $US119 is a price point that fits nowhere in these economic times, it is still way too much for the software.

"It is in Microsoft's best interests to erase all vestiges of Vista from consumers' homes and, by making the upgrade expensive, Microsoft is creating a large disincentive for consumers to move to a far superior platform with a better user experience," he said. He was also disappointed that it included only a one-user license.

"In a world where most homes are moving into a multiple PC environment, it would enhance the consumer home experience if they could upgrade all their home PCs at a single low price with a single boxed purchase," he said.

The company has since launched a family pack for multi-user households, but this is available only in limited markets and does not include Australia.

"We are going to test it in a few markets around the world. If it is successful there, we will launch it within three to six months in other regions," James DeBragga, general manager of Windows consumer product marketing, said.

101 comments

  • I'm a (mature age) student, and got a copy through MS' "it's not cheating" website for $49.95. it's great, and super cheap!

    Commenter
    Don Henley's Ghost
    Location
    Sydney
    Date and time
    October 23, 2009, 9:26AM
    • Advice from somebody in the industry - Wait and See.

      Every Microsoft Operating System since Dos 5.0 needed a service pack to fix the initial bugs. The hype does not guarantee that Windows 7 will be any different. Even Apple is not immune to release bugs (as everybody who upgraded to Snow Leopard and lost all their photos and documents can attest)

      if it comes with a New PC, sure - take Windows 7 instead of Vista, but if you are running your home or business on XP, wait until you buy new hardware. At least that way, you can keep your old computer sitting in the background while you get used to the foibles of the new one.

      Commenter
      Matt
      Location
      Glebe
      Date and time
      October 23, 2009, 9:37AM
      • and software companies wonder why software piracy is so rampant in Australia.

        Commenter
        Sirotilk
        Date and time
        October 23, 2009, 9:45AM
        • As a user of Windows and Apple computers it is exactly this reason why i upgraded my 3 Apples to Snow leapard for a grand total of $69 and refuse to upgrade my 2 Windows XP Machines

          Commenter
          ramakunga
          Location
          Bendigo
          Date and time
          October 23, 2009, 10:03AM
          • $429 to upgrade to Windows 7 Ultimate? What a joke, no wonder Apple's market share is increasing. Even I'm considering dumping Windows and jumping aboard the Apple ship with the new 27" iMacs that have been released.

            Commenter
            t_b
            Location
            Sydney
            Date and time
            October 23, 2009, 10:06AM
            • How bizarre of Microsoft to promote Windows 7, by simply claiming that " works", insinuating that Vista didn't. Therefore, Windows 7 should be free - just like any other patch.

              Commenter
              Bill
              Location
              KL
              Date and time
              October 23, 2009, 10:11AM
              • Get a MAC and see the light, that"s all I can say
                WINDOWS operating systems are garbage

                Commenter
                MACOZ
                Location
                DARWIN
                Date and time
                October 23, 2009, 10:14AM
                • I'll stick with XP, I think.

                  Commenter
                  Martin
                  Location
                  Gippsland
                  Date and time
                  October 23, 2009, 10:21AM
                  • "We see the same questions being asked about most consumer electronics products," David McLean, Microsoft's regional director of entertainment and devices, said.

                    Does he know that Windows isn't an electronics product? It's software. Comparing freight costs of a bigscreen TV to those of a practically empty light cardboard box is ridiculous.

                    That Windows represents more of the cost of a PC then the CPU is ridiculous.

                    Commenter
                    zebba
                    Date and time
                    October 23, 2009, 10:27AM
                    • Just a reminder guys - its an operating system.

                      You don't own a computer for the operating system (OS). You own a computer for the applications, because these are what allow you edit your photos, listen to music, write your documents, run your business, print your creations, play games etc etc etc.

                      Its normal for a delay before older peripherals and applications are tested against the new system, especially true for smaller vendors with less resources and who may not have a pre-release agreement with Microsoft.

                      If the new OS doesn't support your favourite applications, then you don't want it. If there are no drivers for your video card, sound card, digital camera, scanner or printer, then you don't want it.

                      The OS is just one part of the computer system. Before you even consider upgrading, do your research, and make sure that everything you use is going to work, and be supported by the vendors if something goes wrong. Don't expect Microsoft to talk you through configuring your dot-matrix printer, even if it essential to your business.

                      Commenter
                      Matt
                      Location
                      Glebe
                      Date and time
                      October 23, 2009, 10:31AM

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