Microsoft to Offer Vista Upgrade Coupons

Don Lionetti of Redmond, Wash., trys out Microsoft's new operating system, Windows Vista in Atlanta, Ga., in this July 22, 2005, file photo. Microsoft Corp. is no stranger to antitrust skirmishes and complaints from competitors about unfair business practices. But the latest fight over its Vista operating system pits Microsoft against an unlikely adversary: the security software vendors who are some of its most intimate partners in protecting its notoriously vulnerable systems from attacks. (AP Photo/Microsoft, Erik S. Lesser, file) (Erik S. Lesser - AP)

SEATTLE -- People who buy certain Windows personal computers this holiday season will be offered free or heavily discounted coupons to upgrade to Microsoft Corp.'s new operating system, Windows Vista, under a program designed to spur sales despite Vista's delay, Microsoft said Tuesday.

Vista is currently scheduled to be released to consumers sometime in January, after numerous delays that forced the Redmond, Wash., software maker to push the launch date beyond the holiday season. It's also scheduled to be released to big business clients in November, although exact launch dates for both versions haven't been made public.

The coupon program begins Thursday and runs through mid-March. Particulars of the deal will vary depending on the computer maker and retailer.

Among the plans by larger computer manufacturers:

_Hewlett-Packard Co. spokeswoman Tiffany Smith said people in North America who buy certain HP Pavilion, Compaq Presario and HP Digital Entertainment Center computers equipped with Windows XP, Microsoft's current version, can upgrade to Vista for free. There may be shipping and handling fees, depending on the retailer.

_Gateway Inc. will offer free upgrades for people who buy Vista-capable computers directly from the company. Gateway spokeswoman Kelly Odle said shipping charges or duplication fees may be charged people who buy Gateway computers through other retailers.

_Dell Inc. spokesman Bob Kaufman said buyers of Vista-capable Dell computers running Windows XP Home Edition will be able to buy Windows Vista Home Basic at the discounted price of $45, plus shipping and handling charges. Buyers of computers running Windows XP Media Center or Windows XP Professional will only have to pay shipping and handling to get a comparable Vista version, he said.

Mike Sievert, corporate vice president for Windows marketing at Microsoft, wouldn't disclose the financial terms reached with the computer makers. Microsoft estimated it would have to defer about $1.5 billion in revenue from its fiscal second quarter, which ends Dec. 31, to its fiscal third quarter ending March 31 because of the promotion. But the company said it would have no impact on its overall fiscal 2007 results.

In its last earnings report, the company forecast revenue of $49.7 billion to $50.7 billion for the full 2007 fiscal year ending in June. Microsoft reports fiscal first quarter earnings on Thursday.

Matt Rosoff, an analyst with independent researchers Directions on Microsoft, said Microsoft's revenue deferral estimate struck him as high. "They're assuming a lot of coupons will be given out," he said, adding that he's not sure how many computer buyers will be willing to go through the process of upgrading to Vista.

Sievert said it was hard to say how many people will actually install Vista on a new Windows XP computer, even if Vista is available for free.

"What we wanted to do was make it available," he said.