Microsoft's Windows Vista pricing strategy

What's up with the Microsoft Corporation (NASDAQ:MSFT) pricing strategy on the many versions of the soon-to-be-released Windows Vista operating system? Some tend to think that the lower-end version -- Windows Vista Home Basic -- is so low-end and handcuffed that it's not going to sell at all. And that may be fine for Microsoft, as the company may have created that loss-leader specifically for price advertising and nothing more. Companies have done this since the beginning of corporate commerce. Nothing to see here.

But then that begs the question -- what is the "cheapest" version of Microsoft Windows Vista that customers will actually want to buy? If we dispense with the token "Home Basic" edition, we get a starting price point for Windows Vista "Home Premium" of roughly $240. That's almost as much as some lower-end PCs these days. And a lower-end PC these days is actually quite powerful and perfectly suited to most home and business tasks. Note that I didn't say "all," just most. The standard home user and the desktop business user can get by just fine (more than fine) with that $299 HP or Dell system.

Computer company Acer seems to think that Microsoft is plowing the fields of stupidity with its Windows Vista sales strategy. Are customers really going to shell out $240 for Windows Vista Home Premium if the basic version is perceived as not even an upgrade (in many respects) to Windows XP? Not sure about that, but many customers will buy PCs for the fact that Windows Vista comes pre-loaded. Will this cost PC manufacturers more? You bet -- and many are already upset.