'Vista Capable' Lawsuit Could Cost Microsoft $8.5B

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Documents unsealed by a federal court in the "Vista Capable" lawsuit reportedly reveal that Microsoft would have to come up with as much as $8.5 billion to settle accounts with customers affected by its 2006 "Vista Capable" marketing debacle.

Keith Leffler, a University of Washington economist and expert witness for the plaintiffs, estimates that it would cost a minimum of $3.92 billion to as much as $8.52 billion to upgrade the 19.4 million PCs that were sold as Vista Capable to hardware capable of running premium versions of Windows Vista. (Source: computerworld.com)

Leffler said in a heavily-redacted report that he used data provided by Microsoft to arrive at the number of "Vista upgradeable" PCs sold in the U.S. from April 2006 when the Vista Capable marketing campaign started to January 2007 when Vista hit retail shelves. Leffler estimates that of the 19.4 millions PCs, 13.75 million notebooks and 5.65 million desktop computers were classified as Vista Capable but were not able to meet the more stringent requirements for the "Premium Ready" label.

Leffler estimated how much it would cost to upgrade each Vista Capable machine to 1GB of memory and a graphic card capable of running Aero. He figured it would cost a maximum of $155 to upgrade each desktop and between $245 and $590 to upgrade each notebook.

The fluctuation in costs of upgrading notebooks were due to the more expensive replacement of a graphics chip set. Leffler said that in some cases, notebooks would not be able to be upgraded sufficiently to handle any other version of Windows Vista but Home Basic, alluding that some notebooks would have to be replaced with a new machine.

In all, Leffler estimates it would cost Microsoft $832.7 million to upgrade Vista Capable desktops and between $3.08 billion and $7.69 billion to upgrade Vista Capable notebooks.

Microsoft responded by filing papers saying that "plaintiffs seek a remedy that would give them a Premium Ready PC even though they paid for a non-Premium Ready PC," and that it would be a windfall to millions.

The criteria set by Microsoft and used by computer makers said that Vista Capable meant the machine was ready to at least run Windows Vista Basic, but may not be able to run a more powerful version. A 'Premium Ready' logo meant that the PC was able to run a higher version of Windows Vista, such as Vista Home Premium, Vista Business and Vista Ultimate.

The lawsuit is set to go to trial in April.

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