Analyst: Microsoft won't copy Apple's online-only sales for Windows 8

But may trim upgrade edition count by dropping Ultimate from retail

Microsoft will probably trim the number of Windows 8 editions it will sell later this year, but won't mimic Apple's online-only approach to OS upgrades, a retail sales analyst said today.

In developed countries, including the U.S., Microsoft offers Windows 7 in four SKUs, or editions: Home Premium, Professional, Enterprise and Ultimate. All but Enterprise -- available only to volume licensees such as major corporations -- are sold to the general public.

Evidence uncovered by ZDNet blogger Stephen Chapman -- who found a list of Windows 8 SKUs on a pair of Hewlett-Packard support documents -- hints at just three editions of the upcoming OS: a generic "Windows 8," Professional and Enterprise.

Missing from that list: Ultimate.

"There had been interest in Windows 7 Ultimate," said Stephen Baker, an analyst with the NPD Group, but sales were skimpy and vastly outnumbered by Home Premium and Professional.

Baker expects that, if Microsoft does produce a Windows 8 Ultimate edition, it would be an OEM-only SKU. In other words, Microsoft would drop it from retail and offer it only to computer makers to pre-install on high-end PCs.

The two retail editions for Windows 8 will most likely be Home Premium -- perhaps renamed -- for consumers, and Professional for businesses or consumers who need to connect to their workplace network, said Baker.

Enterprise would remain as the upgrade SKU dealt to volume license customers.

Dropping Ultimate from the Windows 8 list would fit with Microsoft's demotion of that edition in Windows 7. Three years ago and several months before Windows 7 launched, Microsoft confirmed that it was dropping the heavily-criticized "Ultimate Extras" from the version.

Microsoft first pitched Ultimate Extras in the Ultimate edition of Windows Vista, but buyers blasted the company for a sluggish release pace of the add-ons that Extras had promised.

Windows 7 came in two other editions -- Starter and Home Basic -- but both were exiled to emerging markets as part of Microsoft's strategy to offer lower-priced versions that could better compete with the rampant piracy in some countries. The company could retain those developing-markets-only SKUs for Windows 8.

Microsoft has not yet disclosed how many versions of Windows 8 for PCs it will sell, and today declined to share more information about its plans.

An announcement of the Windows 8 lineup could come next week. Microsoft will host a Windows 8 launch event in Barcelona, Spain, on Wednesday, Feb. 29, when it's also expected to release the Consumer Preview .

Although Microsoft revealed the names of its Windows 7 SKUs in early February 2009, nearly nine months before launching the operating system in late October, the company is on a slower pace for Windows 8 than it used then. For example, Windows 8's Consumer Preview will appear almost two months later than the early January 2009 ship date of Windows 7's first public beta.

One thing Microsoft won't do, said Baker, is follow Apple's lead and sell Windows 8 upgrades only online. Last year, Apple sold OS X Lion almost exclusively through the Mac App Store, and recently said it would use the e-market later this year to distribute the Mountain Lion upgrade .

"The [Windows] ecosystem is very different from Apple's, so no, I don't think they would go to that extent," said Baker.

Windows 8 will include Microsoft's new Windows Store mart as the sole channel for Metro-style apps -- and some traditional x86/64 Windows software -- but the firm hasn't said whether Windows 7 users will be able to access the store, and thus make it a destination for upgrade downloads.

With the new store's emphasis on Metro apps, Baker doubted that Microsoft would use that channel to sell Windows 8 upgrades -- people with access to the store would, by definition, already be using the operating system -- but acknowledged that the e-store could be used to deliver future upgrades to Windows 8 users.

Instead, Baker said, Microsoft will continue to include brick-and-mortar retail stores in its delivery mix.

"Microsoft wants to be where the customers want to buy," Baker said. "And the key card approach they used [with Office] cut a lot of the costs of being in stores."

Microsoft sold some upgrades of Office 2010 at retail minus installation media, instead including a small credit card-sized piece of plastic -- called "Product Key Cards" -- that unlocked downloaded versions of the suite or added features to the OEM-preloaded Office Starter 2010.

Windows 8 upgrades could be sold using Product Key Cards to activate downloaded trials, or Microsoft could continue to sell electronic editions through its current e-store , where it now sells Windows 7.

Microsoft has not set definitive system requirements for Windows 8 upgrades -- much less prices -- but has indicated that the new OS will run on PCs now powered by either Vista or Windows 7.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer , on Google+ or subscribe to Gregg's RSS feed . His email address is .

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Copyright © 2012 IDG Communications, Inc.

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