Shocker! Microsoft cuts Vista pricing

Cnet's Ina Fried calls the move possibly unprecedented, and I have to agree: I can't ever recall a time when Microsoft has cut the price of a current operating system. I can't recall Microsoft cutting the price of any current product at all, for that matter.

But here we are: If you buy an upgrade version of Vista at retail, you're in for a discount.

Two versions are seeing price corrections, and only in the U.S.: Vista Ultimate, upgrade version, falls from $299 to $219. Vista Home Premium, upgrade version, goes from $159 to $129. All other Vista editions remain priced the same.

Microsoft rationalizes the move by saying that it was shocked to see how, in pricing tests, the increased sales volume "more than made up for" the amount of lost revenue and concedes that it probably set initial prices too high. (Still, why not cut the non-upgrade pricing, too, Microsoft?)

Critics are curious as to why Microsoft didn't cut the price that computer vendors pay for the OS to be preinstalled on new machines, but it's clearly a case of the good old Microsoft monopoly at work. OEM manufacturers have little choice but to install Microsoft's latest OS on their machines, and they're largely beholden to the price that Microsoft sets.

Still, it's nice to see some weakness in the armor of Microsoft's hubris as well as a non-verbal acknowledgement that Vista is not selling as well as Microsoft would like everyone to believe. So, how long before people who paid full price for the upgrade start clamoring for a refund? (Ha!)