Microsoft Corp said Thursday that prices for the Windows 7 computer operating system are largely in line with those for Vista, and that people who buy PCs before the new system goes on sale in October will get free upgrades.

To drum up demand among people who aren't in the market for a new PC, Microsoft also said it is taking limited pre-orders for Windows 7, selling some for as little as US$50.

People who buy Windows Vista Home Premium, Business or Ultimate computers starting Friday can contact their manufacturer for a free upgrade when Windows 7 becomes available on October 22.

expected Windows revenue

As a result, Microsoft said it will defer recognition of an expected US$200 million to US$300 million in Windows revenue until later quarters.

The sale will start Friday in the United States, Canada and Japan, and on July 15 in the United Kingdom, France and Germany.

It will last for about two weeks, or as long as allotted copies of the software last.

The Redmond, Washington-based software maker said it will cost people US$120 to upgrade their existing machines to the Windows 7 Home Premium version, US$10 less than the comparable Windows Vista package. Upgrades to the Professional and Ultimate versions will cost US$200 and US$220 respectively, the same as Vista.

The cost is identical regardless of whether the upgraded machine was running Windows XP or Windows Vista.

Versions meant to be installed from scratch on a computer will cost US$200, US$300 and US$320 for Home Premium, Professional and Ultimate.

By comparison, Apple Inc said in early June that upgrades to its newest operating system, called Mac OS X Snow Leopard, will cost US$30.

For customers buying new machines, the cost of the Windows software is typically included in the purchase price.

The prices announced Thursday are for people who buy Windows separately or upgrade from older versions.

Microsoft is hoping Windows 7's debut will be much smoother than Vista's.

The current operating system was plagued by delays; when it finally launched in January 2007, many people complained it was sluggish and didn't work with existing devices and programmes.

limiting sales

This time, to goose early sales and build buzz, Microsoft is cutting the price by about half for people who pre-order upgrade software for Home Premium (US$50) and Professional (US$100).

People can buy the software on Microsoft's download site or at retailers including Best Buy Company Inc, which said it is limiting sales to three per customer.

Microsoft said this month it is making a version of Windows for Europe that does not come with Internet Explorer, its Web browser, in an attempt to ward off sanctions from antitrust regulators there.

Brad Brooks, a corporate vice-president for Windows marketing, said Microsoft hasn't had time to polish upgrade software for Europe, so it plans to sell the full version of Windows 7 to European Union consumers at upgrade prices at least through December.

- AP