Microsoft Gains $1.5 Billion from Disputable ‘Vista Capable’ Incident
Junuary 7, 2009 New York – Microsoft Pockets $1.5B from Controversial ‘Vista Capable’ Campaign: One expert posits that, in the months preceding Vista’s 2007 debut, PCs deceptively labeled “Vista Capable” made Microsoft a cool $1.5 billion.
The estimate comes from University of Washington economist Dr. Keith Leffler, who testified in an ongoing class-action lawsuit based on the claim that Microsoft deceived consumers to maintain PC sales volume.
In April 2007, Microsoft was sued for promoting as “Vista capable” computers that were only equipped to run Vista Home Basic — a stripped-down version of the software.
Besides Vista Basic, two other versions of Vista are available: Vista Home Premium and Vista Ultimate. Prior to purchase, “Vista capable” computers do not reveal whether or not they can support the other two.
Shortly after the suit was filed, Microsoft added clarifying language to its website, explaining that while all “Vista capable” PCs can run Vista’s “core” features, more advanced features require more powerful machines.
From April ‘06 to Jan. ‘07 — the nine month-run of the Vista marketing campaign — computer makers sold 19.4 million PCs that met “Vista capable” criteria. The amount they paid Microsoft for licensing is undisclosed, MacWorld reports.
But Leffler postulates that Microsoft received an average of $77.57 for each copy, which is where he derived his $1.505 billion total.
In response to accusations that Microsoft unreasonably expected consumers to understand the system requirements for upgrading to the full-featured Vista, the company claims it did all it could to educate the consumer population.
The case will go to trial in April 2009. In November, Microsoft has requested the case be dismissed.
Vista’s launch, delayed several times and subject to lukewarm reviews, was buttressed by some $500 million in marketing dollars, led by Crispin Porter.
In Aug. ‘08, reports circulated that Microsoft dropped an additional $300 million on advertising to rescue the Vista brand. Enter The Mojave Project, a still-running campaign in which Microsoft invites Vista-prejudiced users to try a secret new operating system. Once their expressions of pleasure are recorded on-camera, the company reveals it is Vista.
Microsoft Pockets $1.5B from Controversial ‘Vista Capable’ Campaign: One expert posits that, in the months preceding Vista’s 2007 debut, PCs deceptively labeled “Vista Capable” made Microsoft a cool $1.5 billion. Editing by James Chrystler
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