Simon,

This appears to be a problem with the software update - I am fixing so you should get the whole thing again (or at least a lot more)

Andrew,

To start with I looked at Amazon and I have to ask, did you check taxes?  The US price is tax free while the UK includes VAT - I did a test purchase at both sites to check this, so we have an immeidate 17.5% difference in the two prices sorted out right there.

Microsoft has a global price strategy with everything, even in the UK, internally based on a dollar price.  We have customers and partners who trade globally and we do not have a per country price, nor would they accept anything that was illegal in terms of price fixing.

On the currency question, we have to plan agianst the currency markets to give stability in our price for the supply chain which means we do get something more like the retail exchange rate, not the markets rate.  The retailers would not like a price that changed every week or month, so the prices do not fluctuate that often while the exchange rate does.  If I used an exchange rate like say 1.92 (which is the 200 day moving average) or 1.77 (the 200 day average exchange rate at the start of Microsofts financial year) we get FPP prices more reasonable in the UK.

So what does all this mean?

You can see from the table above that while the UK prices at Amazon are still higher when converted, we are not anywhere near the £100 value, more like £30-£40. Now go to your Amazon site and add shipping and it is not really worth it.  Personally I can accept that the costs of doing business in the UK are higher than the US - having done both. That is the price difference bit answered.

On the setting of the price - I can assure you 100% that some people sell way above our supply price and some people sell at a loss.  I can also assure you that some people only make a few % on one version, but for another version they might make many times more.  On the research I did with Dabs and Best buy the difference between the two markets varied by 20%-42% depending on the version of Vista.  We don't significantly change the ratio of our prices between editions so you need to look for others on that.  I have plugged in all the Amazon US/UK numbers with a 1.92 exchange rate and this is what you get, between 6-48% price difference between the US or UK numbers or £6-64:

OEM vs FPP is about the rights you get with those products (the ability to move the product from one machine to another, where the support responsibility lies, virtualisation options, what you can change in a PC etc etc). Our OEM business is very heavily regulated as is the FPP comparison to it.

All in all, yes I wish the UK price were a straight translation of US:UK at current day to day exchange rates, but that is not true in almost any product in the UK.  As I said, bad maths - such as forgetting the 17.5% (or 19% for the Anytime Upgrade German Site) is just bad.  Having these different costs of doing business in different countries is not new, otherwise manufacturing would not be moving to China and so on.  This is what a world economy means in my humble opinion.

ttfn

David

I should just add that telling a retailer to sell a product below or above a certain price is (I am 99.9% certain, but not a layer) illegal and I am sure that people would be more than happy to take us to court if we did that.

Alex, telling people what price to sell to is not allowed - what they do as a business is maximise their opportunity by selling at the highest price they think their customers will pay.  On the "rip-off" features - this is a very long debate - who had it in beta 1st, who brought it to market 1st etc.  Microsoft works closely to ensure that we have a thriving 3rd party ISV community that provide choice on our platform.  Everytime MS brings something else into the OS it appears that people like the EU suggest it should not be done :-(  I've never seen Apple get the same level of questioning aroudn adding new features to the OS.

However, as I have said many, many time - if your current version of WIndows does everything you need and is safe and secure, stick with it. If you find yourself wanting in some buy, upgrade or go new.  As for the OEM, it is meant for system builders to use to build new systems.

ttfn

David