Microsoft offering Vista coupon

Microsoft Corp. this week will begin a coupon program for personal computer buyers to upgrade to the new Vista operating system when it premiers next year in an effort to avoid a drop-off in PC sales over the holidays and ahead of the software's release.

Microsoft said on Tuesday the upgrade program will begin on October 26 for its much-anticipated Windows Vista operating system and Office 2007 software suite.

The program allows customers who buy a PC running Windows XP to still be able to upgrade to Windows Vista when the new operating system becomes available in early 2007. A similar program is in place for Office 2007, also due out early next year to consumers.

Most large PC manufacturers, including industry leaders Hewlett-Packard Co. and Dell Inc. will participate in the upgrade program, although upgrade offers may vary depending on the company.

The Windows Vista upgrade may be free or sold at a discount depending on the manufacturer, Microsoft added.

"There is no objections for why you'd want to buy a PC this holiday season, because you know you can get the upgrade," said Brad Brooks, general manager of Windows product marketing.

Vista is Microsoft's first major upgrade in five years for Windows, which sits on more than 90 percent of the world's personal computers. In the first year of release, Vista will be installed on more than 100 million computers worldwide, according to research firm IDC.

Microsoft's Brooks estimated that between 80 percent and 85 percent of PCs sold during this holiday season will be eligible for the upgrade program.

Consumers who buy a Windows XP computer at a major retailer or directly from a large manufacturer will see a designation that the PC is "Windows Vista Capable" and then receive a coupon for an upgrade.

After Windows Vista is released, the customer will be shipped a DVD carrying the new operating system.

The Windows and Office business together account for more than half of Microsoft's total revenue and nearly all of its operating profit. The new Windows and Office is scheduled to be released to corporate customers before the year-end.

The program will run until March 15.