PC vendors upset with Vista pricing

PC makers pay $25 to $50 more for Windows XP Pro than for the consumer version

Microsoft is making it harder for PC manufacturers to sell consumer versions of its forthcoming Windows Vista operating system to businesses, a move which is upsetting some low cost providers. 

PC makers looking to cut prices for business PCs often equip their models with Windows XP Home Edition. The software costs less than Windows XP Pro and does not support some enterprise features such as Active Directory management.

But while the consumer version of XP meets the demands of most small businesses today, they are unlikely to enjoy the same user experience in Windows Vista Basic, according to analysts.

"Vendors like Acer were saying that they can make XP Home Edition work and that this is all users really need and they can save all this money," said Rob Enderle, a senior analyst with the Enderle Group. 

"This has worked reasonably well for a number of vendors, but Microsoft is trying to stop that. They want the business guys to buy the business version."

PC makers pay $25 to $50 more for Windows XP Pro than for the consumer version, according to Enderle, who expects a similar difference in the OEM pricing between Vista Basic and Vista Business.

Microsoft is offering three Vista versions for consumers and two for businesses. The Basic version will retail at $199, with a Premium product priced at $239. The standard Business version costs $299.

Computer makers receive discounts for software bundled with new systems.