Dell triples charge to downgrade PCs to XP to $150

Computerworld - More than five months after it stopped selling its popular Inspiron line of consumer desktop and laptop PCs with Windows XP, Dell Inc. is offering the systems with the aging operating system for a surcharge of $150 over the newer Windows Vista.

Dell's Inspiron 1525 notebooks and 530 desktops can be ordered with Windows XP Professional preinstalled for an extra $150, according to the company's Web site. The fee is three times the maximum amount Dell charged last summer, immediately after Microsoft Corp. pulled XP from retail and barred computer makers from installing the more popular XP Home edition on anything but lightweight, low-priced "netbooks."

(In a subsequent story, a Dell spokesman later explained the price differential.)

Computer manufacturers can install Windows XP Professional on PCs at the factory by taking advantage of the "downgrade" rights built into Vista Business and Vista Ultimate. Those rights let Dell install Windows XP Professional in lieu of Vista, although the newer operating system is still shipped with the machine so that buyers can, if or when they choose, move from XP to Vista.

Vista Business and Vista Ultimate are the only editions generally available that allow downgrades, and they can be downgraded only to Windows XP Professional. Under Microsoft's licensing terms, the less-expensive XP Home can't be installed as a downgrade.

Dell is selling the Inspiron 1525 notebooks with a Vista Business license. Buyers of the Inspiron 530 and 530s desktops can purchase either a Vista Business license or, for an additional $20, a license for Vista Ultimate.

Last June, as Microsoft's retirement deadline for XP approached, Dell announced it would sell a limited number of consumer PCs with XP preinstalled, none of them from the Insprion family, citing Microsoft rules as the reason. However, Microsoft denied that it restricted XP to certain types of systems.

Then, Dell slapped a surcharge of $20 to $50 for XP on those few consumer PCs and on computers from its the small-business Vostro line. In October, Dell raised the XP "tax" to $99, which is what it currently charges for installing the operating system on Vostro desktops and laptops.

According to some estimates, more than one-third of new PCs are downgraded from Vista to XP, either by the manufacturer before they're shipped or by customers themselves after they're purchased.

In the past six months, however, downgrades have become less important as more netbooks -- the laptop category of small, lightweight, sub-$500 systems -- have reached shelves. In the face of resistance to Vista by network makers, Microsoft has continued to sell XP Home to them for installation on the smaller laptops.

Just over two months ago, Microsoft extended the availability of downgraded XP licenses to computer makers for another six months, to July 31, 2009. Previously, it had set Jan. 31, 2009, as the date when it would stop selling XP Professional licenses for downgrade purposes.

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