Now that we've accumulated all of the data, it's time to see if my hypothesis passes the litmus test.
Interpretations – Basic Home SKUs
The first thing to point out is the fact that, though prices increased pretty dramatically before 1995, they've leveled out since then, and with XP, they actually went down. You can interpret the graph on your own, but I'll point out some highlights:
- If you bought Windows 1.0 today, it would be nearly twice as expensive as its original MSRP, and only $16.54 cheaper than the list price for Vista Home Basic. Inflation increased the price by nearly $84, or nearly $4/year.
- Windows XP Home was actually $10 cheaper than its predecessor.
- The MSRP for Vista Home Basic is the same as Windows XP Home.
- Every release since Windows 3.1 is more expensive than Vista Home Basic in today's dollars. In fact, Windows 95 Retail tops out at $74 more expensive than Vista Home Basic, and the Upgrade version is $42 more expensive than Home Basic Upgrade.
Interpretations – Advanced Home SKUs
Based on the data, I can see why Microsoft hasn't tried a midrange SKU in so long. The first one was overpriced. Did anyone actually buy that product? I'd love to see the sales numbers.
According to my research, if you were to buy Windows/386 today, it would cost you a full $100 more than Vista Home Premium. So when asking yourself if Aero Glass is worth it… ask yourself if you consider the banishing of the "Whitewash Drag" a more important advancement to Windows than the 386 processor.
Interpretations – Pro SKUs
Based on the data, I can see why Microsoft hasn't tried a midrange SKU in so long. The first one was overpriced. Did anyone actually buy that product? I'd love to see the sales numbers.
An interesting piece of data I saw here was that there is only a 36 cent difference between the inflation-adjusted price of Windows 2000 Pro, and the average for all the inflation-adjusted Pro SKU prices to date. I don't know if you can draw any conclusions from that, but it is interesting nonetheless.
By far the most surprising thing in this set is the difference between the inflation-adjusted 200 Pro Upgrade price, and today's Ultimate Upgrade price. It's less than a buck, folks. How can you say that Ultimate is too expensive when the difference after inflation is 58 cents???
So Is Vista Really Cheaper?
Based on the evidence presented, I've shown conclusively that Windows Vista is the most inexpensive operating system they've released to date. After almost 10 years of steep price increases, the MSRP of Windows has been flat for more than a decade, with the cost after inflation steadily decreasing since then. One would expect that the cost of Windows would rise with inflation, but I have shown that simply isn't the case. And while newspapers are quick to trump the (so far) subdued public excitement for the Windows Vista launch compared to Windows 95, purchasing that OS in today's dollars is a VERY tall order.
That answer, however, is VASTLY different from the public perception. According to the poll in this CNET article, 76% of respondents think Windows is actually more expensive than it used to be. That alone screams to me that Microsoft has not done enough to convince people of the value of Windows and how it has improved over time. Hopefully, this exercise, along with CNET's poll data, will be a wakeup call for the Windows Marketing team to start looking at how to address this issue, which may be the most significant issue Microsoft has ever faced. And if they don't, they can always hire me and I'll do it :D.
Wrap Up – Part One
Well, I hope you've enjoyed this exercise as much as I have. But I'm not even close to being finished yet. For the next article in this series, I'll gather some new data about each OS release, and break down the explosive growth of the operating system. In Part 3, I'll tie everything together by showing you how Windows gives many economic theories The Finger.
So stay tuned…
(OK, you can start commenting now.)
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