Analysts Critical of High Regular Prices for Windows 7

It's the day after Microsoft announced Windows 7 pricing, and the reaction is mixed. A special two-week promotion, with a limited number of advance orders for a low-priced upgrade, is doing well.

On Thursday, the software giant said it would offer through several retailers an upgrade from Windows Vista or XP to Windows 7 Home Premium at $49.99 or to Windows 7 Professional for $99.99. The discounted OS is already a best-seller in Amazon's software category.

The company said the normal price for the Home Premium upgrade will be $119.99, compared to $129.99 charged for Vista. The Windows 7 Professional Upgrade will be priced at $199.99, and the Windows 7 Ultimate Upgrade at $219.99.

Some observers are not happy about these prices.

'Erase All Vestiges of Vista'

NPD Group Vice President for Industry Analysis Stephen Baker wrote Thursday on his company's blog that "$119 is a price point that fits nowhere in these economic times." He wrote that the price is still "way too much for the software."

Baker acknowledged that this upgrade price is lower than Vista's was, but said that is "damning with faint praise." Microsoft's best interest, Baker added, is to "erase all vestiges of Vista from consumers' homes," but by making the upgrade expensive, the company is creating a "large disincentive" to move to the new OS. In addition, he noted, it's only one user license, while many homes have more than one computer.

Baker pointed out that Apple's Snow Leopard upgrade will be $29 for one user license and $49 for five users. Some observers have suggested, however, that Snow Leopard is more of an upgrade, while Windows 7 is a new OS. Apple's computers are generally more expensive than comparable Windows-based ones.

Interoperability 'Vista Should Have Had'

Laura DiDio, an analyst with Information Technology Intelligence Corp., said that, despite Windows 7's...