FAQ: XP deathwatch, T minus 1 week

Dell gives XP a final chance and after June 30, the 'XP tax' kicks in

One week. That's how long before Microsoft Corp. pulls the plug, more or less, on Windows XP.

Next Monday, June 30, Microsoft will mark a milestone for the seven-year-old operating system when it stops providing licenses to larger computer makers and halts shipments of boxed copies to retailers. At that point, Windows XP, which received a five-month extension back in September 2007, looks like it will, after all, go quietly into the night.

But that doesn't mean new questions haven't popped up since last week, when we ran the most recent installment in our FAQ series. Did Dell Inc. really stop selling PCs with XP installed, as it swore it would? And what's all this about a tax on XP?

Any new signs that Microsoft plans to grant a last-minute pardon? Not in the past week, no.

Did Dell stop selling PCs with XP preinstalled, as it promised? No. It did yank XP options from virtually all of its Inspiron consumer brand, which comes in both desktop and laptop editions, last Thursday, as it said it would. Dell also stopped offering the older operating system on most of the higher-end XPS consumer line, as well as its small business and enterprise machines.

But in a turnabout on Friday, Dell announced that it would continue to sell three models of the Inspiron 530 with XP until early Thursday, June 26. "Extended by popular demand," a sales page in Dell's online store now reads. "Offer ends 6/26/08 @ 5:59 a.m. CT [Central Time]."

The three 530 configurations start at $549 and can be ordered with either Windows XP Home, or for an additional $20, XP Professional.

As promised two months ago, Dell also offers a factory-install option for Windows XP Professional on some new machines by using the downgrade rights build into Vista Business and Vista Ultimate. As of last Thursday, Dell offered the option on its entire small business line -- the Vostro, Latitude, OptiPlex and Precision brands -- and for three configurations in the XPS brand: the 630 and 720 H2C desktops, and the M1730 notebook.

Are other computer makers still selling XP systems? Theoretically, yes, but practically speaking, only as downgrades.

Hewlett-Packard Co., for example, which previously had said it would continue to make XP available until June 30 on a "select number of consumer notebook, gaming and business products," didn't show anything but Vista on any of its consumer models sold through its online store when we researched it on Sunday, June 22.

An HP sales representative identified only as Ruby confirmed as much in an online chat. "I am sorry, but that is not a product line we carry here at our store," said Ruby. Instead, she recommended we look through HP's small and midsize business banner, where HP preinstalls XP using Vista downgrade rights on some systems -- just as it does on some machines it sells from its enterprise section.

How much is it going to cost to downgrade to XP on a new PC? That depends on the computer maker.

Dell, for example, isn't charging anything for factory-installing XP on Latitude, OptiPlex and Precision systems, but it is adding up to $50 for the downgrade on the Vostro brand, its entry-level small business line, beyond what it would cost for the Vista license alone.

The downgrade fee for the three XPS machines, meanwhile, is $20.

HP, on the other hand, doesn't add a downgrade surcharge for preinstalling XP in lieu of Vista.

What about the "XP tax" I've heard about? The difference between XP in its usual form and XP as a downgrade is what some have dubbed the "XP tax," a surcharge, so to speak, derived from Microsoft's licensing requirements. After June 30, those requirements limit XP as a factory-install to downgrades, and further limit those downgrades only when purchasing Vista Business or Vista Ultimate.

Here's an example of the tax in action.

At Dell, the Latitude D630 laptop comes standard with Vista Home Basic, the lowest-priced version of the operating system in Microsoft's arsenal. But to qualify for a downgrade to XP Professional -- which is, remember, not just the only version that can be factory-installed but also the pricier of the two, Home and Pro -- customers have to opt for, at the least, Vista Business.

Vista Business is a $99 add to the D630, according to Dell's online store customization tool, as is what Dell dubs the "Bonus" option, which in effect sells you a license to Vista Business but installs XP Professional.

In this case, then, the XP tax is $99.

But it can be higher. Much higher. Take Dell's XPS 1730 notebook, a zaftig gamer's portable (10.6 pounds, minimum). By default, the lowest-priced XPS 1730 configuration is sold with Vista Home Premium, which doesn't allow for downgrading to XP. Instead, buyers with XP on the brain have to shell out an additional $170 (which includes a $20 downgrade surcharge) for Vista Ultimate just to get XP.

The tax, of course, is a byproduct of the price differences between versions of Vista. But while Vista Home Basic omits numerous features found in Vista Business -- see this Microsoft chart for the maker's take -- and even Home Premium lacks a few features included with Business, it's all moot if all you want is XP.

No wonder that some pundits, bloggers and analysts have said that XP's days are numbered.

Can I still buy Windows XP Home? Yes. All three of the major online technology outlets -- Amazon.com, Buy.com and Newegg.com -- that we started tracking four weeks ago still show XP Home in stock.

Even though the June 30 deadline is just a week away, don't forget that Microsoft is not drawing a line in the sand on retail sales: Stores, brick-and-mortar as well as online will be allowed to sell out their existing inventory.

Has there been any change in XP's retail price in the last week? No, the prices at the e-tailers we track didn't budge. Like last week, the least expensive price, shipping included, for a boxed copy of Windows XP Home OEM was the $84.99 posted by Newegg.com.

A three-day average of the lowest "Buy It Now" price, shipping included, for a legitimate copy of Windows XP Home OEM on eBay, however, fell ever so slightly from last week, down 0.3% to $90.57.

How tough will it be to get a copy of XP a week from now? Not hard at all by the evidence on eBay, which showed a 9% jump in the number of auctions that popped up when we ran a search using "Windows XP" and narrowed the results by clicking "Software."

Other "inventory" tallies on eBay that we've tracked for the past five weeks were also up over last week. Results for the same search, narrowed not only for "Software" but also for "Operating Systems" and then "Windows," was up nearly 17% in the same period.

Over the longer haul, it's clear that auction listings have climbed substantially as XP's retirement date has approached. The Windows XP/Software/Operating Systems/Windows search results, for example, are up 24% over the first time we checked eBay on the weekend of May 24 and 25. For Windows XP/Software, the increase was an even larger 61% over the same four weeks.

Copyright © 2008 IDG Communications, Inc.

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