Microsoft deal discounts Windows 7 upgrades by 58%

Microsoft launched a promotion that discounts Windows 7 upgrades as much as 58% when customers also buy a new Windows 7 PC.

The deal, which was available Thursday from the likes of and Staples, applies when consumers purchase a new computer equipped with Windows 7 Home Premium, Professional or Ultimate.

Staples, for instance, will sell a copy of Windows 7 Home Premium Upgrade for $49.99, a 58% savings compared to the $119.99 list price, when buyers also purchase a new Windows 7 PC. Amazon, on the other hand, dropped the price of Home Premium Upgrade to $59.95, a savings of $60, or 50%. Under the promotion, Amazon also cut the price of Professional Upgrade to $115.99, an $85 savings (42% off) and Ultimate Upgrade to $139.99, an $80 savings (36% off) when customers ordered a new Windows 7 notebook or desktop at the same time.

Stephen Baker, an analyst with the NPD Group, which specializes in tracking retail sales, called the promotion "brilliant" in a blog post this morning. "It gives incentive to some of that huge XP installed base to do the right thing and upgrade into a new PC, while offering them a way to cost-effectively upgrade that companion notebook they have bought in the last two and one-half years which is running Vista," Baker said.

"Windows 7 is even greater the more PCs that you have that run it," Baker said in a follow-up interview. "People aren’t likely to go out today and buy multiple new PCs, but this is a great way to drive the value of Windows 7."

Baker called out Home Group, a new feature in Windows 7 that simplifies the task of setting up file, printer, photo, and music sharing between Windows 7-equipped PCs on a home network, as one reason to upgrade as many home computers as possible to the new operating system.

According to Microsoft, one discounted copy of Windows 7 Upgrade can be bought per new PC, with the discount applicable to the same version as that which powers the PC. In other words, buyers of a new PC running Windows 7 Home Premium can purchase an upgrade copy of Home Premium at the discounted price, while consumers who buy a PC with Windows 7 Professional can get an upgrade copy of that edition at the reduced price.

Amazon, however, appears to be offering buyers of any Home Premium, Professional or Ultimate-equipped PC the discount for any of the three editions’ upgrades. Buyers can order a notebook running Home Premium, for example, but buy an upgrade to Professional.

Some buyers are ineligible for the deal, however. New machines running the entry-level version of Windows 7, dubbed Starter, don’t qualify, essentially preventing most purchasers of netbooks — which are dominated by Windows 7 Starter — from taking advantage of the promotion.

The discounted upgrade deal expires Jan. 2, 2010, and applies to consumers in the U.S. and U.K, as well as those in Australia, Canada, Czech Republic, Denmark, France, Germany, Greece, Hungary, Latvia, New Zealand, Poland and Slovakia. . Microsoft and its retail partners also started selling the $149.99 Windows 7 Family Pack today. The package lets buyers upgrade as many as three PCs from Windows XP or Vista to Windows 7 Home Premium.

College students are eligible for a separate offer that prices Windows 7 Home Premium Upgrade at $29.99.

The catch: Buy a new Windows 7 PC, get cut-rate copy of an upgrade for another PC

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