In what may be an unprecedented decision, Microsoft said Thursday that it plans to lower the retail prices for several flavors of Windows Vista.

For those in the U.S., Microsoft is cutting prices only on the higher-end versions of Vista, and only for the upgrade version used to move from XP or another copy of Vista. The suggested price for Vista Ultimate drops to $219 from $299, while Home Premium falls to $129, from $159.

Other developed markets will also see price cuts, while in emerging markets, Microsoft is eliminating the distinction between full and upgrade versions of Home Basic and Home Premium as it attempts to convince more users there to use genuine software.

Gartner analyst Michael Silver said the move--which applies only to standalone versions sold at retail stores--is puzzling. "It's sort of an odd move," said Silver, who noted that the market for such upgrades is fairly limited. Those who bought XP in the fourth quarter of 2006 got a coupon for a free Vista upgrade, while most of those who have bought systems since then have gotten Vista. Machines purchased prior to 2006 probably aren't all that attractive as candidates for a Vista upgrade.

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