Microsoft cuts Windows price to $40 in Thailand

ICTD News for 27 August 2003
From: ICTD Newsmaster <ictdnews@undp.org>
To: ictdnews@undp.org

http://www.infoworld.com/article/03/08/25/HNwindowsprice_1.html

Gartner: Microsoft cuts Windows price to $40 in Thailand
Move could lead to lower prices in other countries

By Sumner Lemon and Joris Evers, IDG News Service August 25,
2003

In a move that could lead to lower prices for Microsoft's
software in other countries, the Redmond, Washington,
software company has cut the price of its Windows operating
system and Office application suite in Thailand, according
to a report released by market analyst Gartner Inc.

"Microsoft -- in response to a Linux threat -- recently
reduced pricing to $40 for an Office and Windows package it
offered as part of a government initiative in Thailand,"
said the report.

"Microsoft may offer a similar package in China as an
incentive to keep Chinese enterprises using its products,"
the report added.

Ongoing pricing pressure and backlash against Microsoft's
dominance will move the company to offer more competitive
pricing in other regions, according to Gartner. Programs
similar to one launched in May by the Thai government to
help low-income earners buy a desktop or a laptop PC with
Internet access will add to this pressure, Gartner said.

Microsoft initially did not take part in the Thai program,
so the government selected Red Hat Inc.'s Linux operating
system and Sun Microsystems Inc.'s StarOffice productivity
suite, according to the Gartner report.

Price adjustments should start this year and by the second
quarter of next year Microsoft will have cut prices by at
least half in emerging markets, the research company
predicted.

Responding to the report, Microsoft said Friday that it has
no current plans to expand the Thai program to other
countries. However, the vendor is willing to discuss with
governments how it can help give underprivileged users
better access to modern technology, it said in a statement
via e-mail.

Despite an increased effort to battle software piracy,
Microsoft faces a flourishing market for illegal software in
Thailand. Copies of Windows XP can be found there for $4 and
Office XP for $8, according to Gartner.

Hewlett-Packard Co. is selling Linux-based laptops in
Thailand for $450 as part of the program initiated by the
country's Information, Communications and Technology (ICT)
ministry. Those laptops went on sale in May and HP has
described demand as overwhelming.

The Microsoft price cuts in Thailand represent a steep
discount compared with the U.S. pricing for Windows and
Office. The full version of Windows XP Home can be purchased
for as little as $84 in the U.S., according to PCWorld.com's
Product Finder. The full version of Windows XP Professional
can be found for $130.95 and Office XP Professional for
$254, according to the site.

The country-specific price cut in Thailand, the second in
Asia this year, represents a further break in Microsoft's
long-standing policy of charging the same price for its
software in countries around the world.

Pricing of Microsoft products has been a sensitive issue in
many parts of Asia. In 2002, Taiwan's Fair Trade Commission
opened an investigation of Microsoft's business practices
here, questioning whether the company had abused its
dominant position in the market to inflate the prices of its
products.

After a six-month investigation that proved inconclusive,
the two sides reached a settlement earlier this year, with
Microsoft agreeing to cut the price of some of its software
products by an average of 26.7 percent.

Under the terms of that agreement, the price of Windows XP
Professional Edition in Taiwan was cut by 23.7 percent while
the price of Office XP was cut by up to 16.9 percent. The
greatest price reductions came for Windows XP Professional
Academic Edition (54.5 percent), Office XP Academic Edition
(50.1 percent) and Word (42 percent). Specific dollar
figures for the price cuts, which became effective on March
15, were not released.

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