Microsoft: An Upbeat Launch for Windows 7

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Chinese PC maker Lenovo says its Windows 7 PCs will boot up 56% faster than Vista machines and will shut down and go to sleep faster, as well. At a time when the market is rapidly shifting toward laptops, such speed improvements are well-timed. "With a laptop, you want it to be ready when you open that lid and to shut down when you close it," says Dell's Gruzen.

The advertising strategy is similarly pragmatic, with coordination on marketing under way earlier in the process. "With Vista, there was a bit more of the 'Ta-da, now we'll remove the handkerchief,' " says Jason Bonfig, vice-president for computers at retail giant Best Buy (BBY). This time, Microsoft is putting more of its marketing might behind promoting particular products and offers from its partners. Dubbed "Seven Days of Windows 7," the promotion will help market deals such as an Acer all-in-one priced at $800 that usually goes for more than $1,000.

Combating Price Declines

One of the most eye-catching of these offers is from Best Buy. After sitting in on many engineering meetings with Microsoft, the retailer decided to come up with a package for families that wanted a fresh start with their PCs. The idea was to end the frustration of bringing home a state-of-the-art PC and not being able to take advantage of new features—such as improved networking. So Best Buy worked with HP to come up with a "Home Makeover" package that includes a desktop, notebook, and cheaper netbook, along with a liquid-crystal-display monitor and free setup from Best Buy's Geek Squad for $1,199. Bonfig, who says this represents roughly a $600 savings, says the deal will be promoted in stores through the end of the year.

Still, PC makers are hopeful that some of the new capabilities of Windows 7 will help them stem the accelerating price drops of recent years. Dell's pricey, top-of-the-line Adiamo notebooks will include location-awareness tools that help users automatically get local weather reports or find the nearest French restaurant. And the biggest opportunity for selling higher-end machines may come from computers that boast iPhone-like touchscreens.

Of course, plenty can still go wrong. Viruses, malware, and unexpected problems could render the performance claims of Microsoft moot for many users. And because Windows 7 needs less power than Vista did, it's possible many consumers may decide to forgo a new machine and simply upgrade their current one. PC makers say the combination of low prices and new features should take care of that. Lenovo marketing manager Tom Tobul notes that a middle-of-the-road new Thinkpad laptop starts at just $529, while Windows 7 by itself costs $149. "We believe a lot of customers are going to find the economics of new systems very compelling," he says.

Apple's Not Going Away

And there's the ever-present threat from Apple (AAPL). The company has been gobbling market share in recent years—including last quarter, when its Mac sales grew 17% in a PC market that grew 2%, according to IDC. Phil Schiller, Apple's senior vice-president for product marketing, says, "Windows 7 is still Windows, and there's no guarantee it will be a good experience."

As much as Apple has grown, it still commands only 6.6% of the market. And Microsoft, thanks in part to coordinating its release of Windows 7 closely with its PC-making partners and learning from the mistakes of Vista, aims to keep it from rising much further.

With Tom Giles in San Francisco. Burrows is a senior writer for BusinessWeek, based in Silicon Valley.

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