Microsoft has slashed the price of Windows Vista Home versions in China. Microsoft made the dramatic move in a bid to boost sluggish sales of its latest Windows operating system.

Microsoft cut the retail price of Windows Vista Home Basic in China to 499 renminbi (£33), from 1,521 renminbi - a 67 percent reduction. The Home Premium version of Vista also got a significant price reduction, down 50 percent from 1,802 renminbi to 899 renminbi.

The new prices, which were introduced last weej and outlined in a statement from Microsoft on Friday, represent a steep discount compared to what users in the UK are charged for the software.

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Microsoft sold 60 million Vista licences by the end of June, but many in the industry remain unimpressed by the new operating system. And some businesses are specifically asking OEMs to supply new computer equipment with Windows XP.
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That disatisfaction bubbled to the surface in a recent remark made by Acer CEO Gianfranco Lanci.

"The whole industry is disappointed with Windows Vista," Lanci told the Financial Times Deutschland.

China is the world's second-largest PC market, and is counted among the fastest growing markets in the world. But it also has one of the highest software piracy rates, and many white-box PC makers and consumers install pirated versions of Microsoft's software on their computers.

The main problem is cost. Chinese users have long complained that Microsoft's software prices, traditionally kept in line with those set in other markets, were unrealistically high given local incomes. Reducing Vista's price in China narrows the price gap between original versions of Microsoft's software and pirated copies, and should result in higher sales.