The most basic version of the software will cost $199 to upgrade here compared with $US119 ($129) in the US, but, at the top end of the range, Australian customers must pay $429 to upgrade to the Ultimate version, almost double the $US219.99 ($238) price tag.

David Flynn: Should you buy Windows 7?

"Retailers operate with much tighter margins in the US than Australia. That is a fact. Taxes in this market are very different to Australia. That is a fact. We are a large country and we need to freight products from overseas and that is a fact. These things do affect pricing in this market," McLean said. However Choice spokeswoman Elise Davidson disagreed that these costs could mount up so substantially. "Australians don't mind paying a little bit more for reasons such as the size of our market, our large land mass and delivery costs. People understand this and accept it. But when you're looking at almost double the cost of what you can buy in other markets, even taking taxes into account, we are being ripped off.

"We looked at this with Vista as well and Choice doesn't think this price discrimination is fair for Australian consumers," she said. ------------------------------------------------------

Windows 7 launch centre

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Despite recent shifts in the exchange rate, Australian wallets are also being hammered in electronics shops where exorbitant pricing persists for consumer electronics goods. This week, CommSec chief economist Craig James recommended sourcing new tech gadgets and other items overseas instead of waiting for local retailers to react to the soaring Australian dollar and lower the price of products. However Davidson warned that software companies such as Microsoft were able to use technology to stop Australians from getting a better deal by banning international IP addresses and credit card numbers from internet sales. Microsoft said it expected Australian retailers to set their own competitive pricing for the software with bundles and deals to suit a wide range of users.

"We set [the] base price, trying to provide stability for the ecosystem, but the price ends up being the margin position the retailer wants to take," Jeff Putt, Windows consumer lead at Microsoft Australia, said. Microsoft is offering a free upgrade of Windows 7 to anyone who bought a Vista PC from the end of June to the end of January. Some experts have suggested that other Vista and XP users wait until they buy a new PC before embracing the platform. Davidson predicted that the high cost of upgrades would prevent many users from adopting Windows 7. "We expect that, apart from those who remain dissatisfied with Vista, most will be simply waiting until they upgrade their own computers before bothering to get the new operating system from Microsoft," she said. Stephen Baker, a consumer analyst for NPD Group in the US expressed his disapproval in June at the way Microsoft had priced upgrades, given the general level of dissatisfaction with Vista. "I am mightily disappointed in a couple of aspects of Microsoft's upgrade plans for non-PC buyers. First is the pricing on the Windows 7 Home Premium upgrade. Besides the fact that $US119 is a price point that fits nowhere in these economic times, it is still way too much for the software.

"It is in Microsoft's best interests to erase all vestiges of Vista from consumers' homes and, by making the upgrade expensive, Microsoft is creating a large disincentive for consumers to move to a far superior platform with a better user experience," he said. He was also disappointed that it included only a one-user license. "In a world where most homes are moving into a multiple PC environment, it would enhance the consumer home experience if they could upgrade all their home PCs at a single low price with a single boxed purchase," he said.

Loading The company has since launched a family pack for multi-user households, but this is available only in limited markets and does not include Australia. "We are going to test it in a few markets around the world. If it is successful there, we will launch it within three to six months in other regions," James DeBragga, general manager of Windows consumer product marketing, said.