The comparison with OS pricing seems like a fallacy. You need an operating system on every computer; most people are scared of "that Linux thing". You can only sell as many Mac OS upgrades as there are Macs out there, so the way to sell more copies is to sell more hardware. For a large part of the population, Windows is therefore more or less inevitable.
Now, if Microsoft wanted to get more people to abandon XP, then offering a direct upgrade to Windows 7 and lowering the price would probably work.
My take on this though is that if the pricing was more affordable then piracy would be less prevalent. One of the reasons that OS X has a lower level of piracy is that their OS pricing is more affordable (I'll admit there are many other factors).
I don't have stats to back this up, but I would assume that Windows has an incredibly high percentage or pirated installs (given their attempts to combat this) and pricing is a big factor in this.
I fully agree with you. The difference between 'retail' and 'bundle' discounts is a pretty good indicator software retail pricing is terribly wrong.
And then there is the fact that you could sell software online easily and you don't actually need a retail channel.
Direct-to-consumer is the only way that makes any sense at all. Why even have a physical goods channel for something that is outdated before it has left manufacturing ?
The other side of the coin is that now people are so used to being able to get that stuff for free that to reverse the trend away from wholesale copying is very difficult.
Plenty of people feel towards companies like microsoft the way they feel towards the taxman. You've already had me pay 6 times over to use this road, I refuse to pay you any longer. The profit margins of those companies don't help either.
Why even have a physical goods channel for something that is outdated before it has left manufacturing ?
Never underestimate the bandwidth of a tractor trailer of CDs.
(This is, relatedly, why there is a retail price for MMORPGs that companies would really rather give you for free. They don't give a farthing about the box money, they want to eliminate every barrier to you handing over your sweet sweet credit card details. However, if they don't charge for the box, then Best Buy won't stock them, and they'll lose accounts to their competitors who are on the shelves.)
One of the very legitimate uses of bittorrent is to solve this problem elegantly.
Sending out a gig of data even on EC2 (which is pretty expensive) costs about $0.10.
They can have my credit card details online via a secure http connection for the $1 they'll have to charge me to make up on the fees. Even beter, now they have that data instead of best buy.
After all, I highly doubt the privacy watchdogs would agree to bestbuy passing that information (especially the cc data) up the chain to the supplier.
After all, I highly doubt the privacy watchdogs would agree to bestbuy passing that information (especially the cc data) up the chain to the supplier.
Why not? Doesn't seem to be any different than buying and activating an iPhone at an Apple store. AT&T gets all of your billing information from Apple. If anything, it seems likely that Best Buy could do much tighter integration without anyone getting concerned.
I doubt it, a lot of people's machines that currently run XP would not be able to run Windows 7 without upgrading the hardware. Even if they could they either don't care or think it's too complicated.
Most of the people that are left know how to pirate it anyway or have annual agreements with MS anyway so they are basically competing with that.
Now, if Microsoft wanted to get more people to abandon XP, then offering a direct upgrade to Windows 7 and lowering the price would probably work.