Microsoft Delaying Vista Causes Rock Bottom PC Prices

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Interested in buying a new computer? This holiday season may be the best time if price is the determining factor for you. Because of Vista’s release being after the holidays, 70% of notebooks/laptops sold during this holiday season will be priced at less than $1,000 (compare that with 38% in 2004). This according to Current Analysis, a research firm in the business of tracking weekly PC sales. Research director Samir Bhavnani explains, “It’s going to be a blowout sale.”

But don’t just take his word for it. Elliot Becker, a Circuit City VP, describes how 17-inch-wide screen notebooks are falling to prices less than $1,000 from about $1,300 a year ago. And Sony’s VP of marketing for the Vaio brand, Mike Abary, talks of Sony bracing for impact. “We expect to see the apex of price degradation to occur this holiday.” Sony just recently began offering its N-series notebook at less than $1,000 for the first time.

The price slashing is indicative of just how much the PC industry is dependent on Microsoft’s core software. Vista is being called “the biggest overhaul of Microsoft’s operating system in 10 years” but won’t be available for home use until January. The PC industry had hoped (and was expecting) Vista in time for the holiday season to help boost sales before the year ends. The delay to January comes at a bad time, as PC sales declined by about 2% in the third quarter this year.

Microsoft had even acknowledged the PC industry’s issues with the unfortunate time of Vista’s release. “Yes, there’s concerns from partners, concerns from us, concerns from everybody that we could be slowing down PC demand for the holiday season,” says Microsoft General Manager Brad Brooks. But Brooks also goes on to explain how a Vista upgrade program will help give sales a boost for the holidays. The software giant estimates that at least 85% of the computers sold this season will be compatible with Vista for consumers to install later. Right. Some how this brings little comfort to the industry that is in price slashing mode.

HP, for example, is delaying certain product launches until Vista is really ready for the consumer. The company’s new products were to show off some of the nifty features and compatibility with Vista, something not very possible if the operating system isn’t ready.

Some companies are hoping they can attract buyers while avoiding the issue of price. Sony is releasing 1,000 limited-edition James Bond Vaio PCs (pictured above) while also pushing a new pink notebook aimed at college-age women (pictured at the top). Still, though, Gateway will be releasing its new NX570 series notebook on November 9 for only $699 after a $200 discount for the holidays. And HP says its entertainment notebook (dv2000) will sell for $569.99 after a $50 rebate.

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