Microsoft offers 3 PCs for $1,199 as Windows 7 debuts

NEW YORK — The day after Apple showed off a new line of iMacs starting at $1,199, Microsoft announced an offer available through a partner, retailer Best Buy: three Windows 7 computers for the same $1,199.

The package includes a laptop, desktop computer and netbook, and all come installed with Microsoft's new operating system, Windows 7, which launches today in New York. It also comes with a wireless router and a house visit from a Geek Squad member to set up the network.

Apple may have distinguished itself with ease of use and elegant design. But in a yearlong campaign that began with commercials of shoppers choosing PCs for their lower prices, Microsoft has pulled away from the competition, redefining itself as a low-cost leader.

The company is selling Windows 7 to students for as little as $29.99, and to families in a three-pack for $149.99. On Wednesday, the company also said it would give upgrade discounts to people who buy a new PC so they can "Windows Seven-ify" their old computers.

Today's rollout of the latest version of Microsoft's flagship product involves a launch party in this city. Ahead of that, Microsoft, computer makers and retailers announced a flurry of deals Wednesday to breathe life into the market.

"Windows 7 is hoping to be a catalyst for a PC feeding frenzy, which it could be," said Rob Enderle, head of the analyst firm The Enderle Group. "In the fourth quarter, PCs are competing with everything — netbooks, TVs, white goods like washers and dryers, consumer electronics. The only question is whether Apple gets hit by the wave or rides it."

Microsoft spokesman Chris Flores said with Windows 7, the company had focused on "choice as much as value."

"Not everything is $499" either, he said, and computer makers will be showing Windows 7 on higher-priced high-powered gaming systems and ultra-thin laptops.

The deals are flooding the marketplace as some forecasters say PC sales could decline next year. The research firm Gartner expects computer sales to decrease by 2 percent this year, and does not think Windows 7 will give sales a boost. About half of Windows sales are driven by consumers, and the other half by business purchases.

Consumer buying of PCs tends to be steadier and more predictable. "The overriding factors in PC demand with consumers are the GDP (gross domestic product) and consumer confidence," said Roger Kay, chief executive officer for analyst firm Endpoint Technologies Associates.

Consumer spending is where Apple competes with Microsoft, but not a lot of computer makers announced new computers to showcase Windows 7.

Corporate spending depends on both the economy and how well the software performs. The economic downturn that began last fall has depressed investing in technology. And even before that, many businesses were turned off by incompatibility problems with Windows Vista when it first launched in 2007. A number of companies even downgraded to Windows XP, Vista's predecessor.

Tom Tobul, executive director of software marketing for Lenovo, said there is pent-up demand in the business market. Computer maker Lenovo announced two new ThinkPad laptops aimed at business customers that start at $529.

"The economics of buying a new system are better for many shoppers, given the long life span of people's systems. Many skipped Vista," Tobul said. "The market is coming back and Windows 7 is a great inflection point."

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com