About us
Contact us
RSS
Newsletters
Blogs
Management
Technology
- Applications
- Business Intelligence
- Development
- Hardware
- Mobile & Wireless
- Networking
- Internet
- Operating Systems
- Security Products
- Servers & Datacentre
- Storage
Toolbox
Training
Books
White Papers
Topic Pages
Resource Centre
Laptops technology > hardware > news
May 10, 2008
Microsoft U-turn to stop Linux dominating ultra low cost PCs
Bargain priced XP if suppliers limit the hardware specs
By Agam Shah, IDG News Service
Microsoft is launching a program to promote the use of its Windows OS in ultra low-cost PCs, one effect of which will be to limit the hardware capabilities of this type of device, IDG News Service has learned.
Advert
Microsoft plans to offer PC makers steep discounts on Windows XP Home Edition to encourage them to use that OS instead of Linux on ultra low-cost PCs (ULPCs). To be eligible, however, the PC vendors that make ULPCs must limit screen sizes to 10.2 inches and hard drives to 80G bytes, and they cannot offer touch-screen PCs.
The programme is outlined in confidential documents that Microsoft sent to PC makers last month, and which were obtained by IDG News Service.
The goal apparently is to limit the hardware capabilities of ULPCs so that they don't eat into the market for mainstream PCs running Windows Vista, something both Microsoft and the PC vendors would want to avoid.
Imposing the limitations solves a number of problems for the PC industry, said industry analyst Roger Kay, president of EndPoint Technologies Associates. "It allows PC makers to offer a low-cost alternative, and it prevents eroding of pricing and margins in the mainstream OS market," he said.
Microsoft declined to comment on the documents. "We don't speak publicly about our agreements with [PC makers]," the company said.
ULPCs are an emerging class of laptops that carry low price tags -- about £150 to £300. Early examples include the Asus Eee PC and One Laptop Per Child's XO machine.
The systems already have limited hardware configurations. Microsoft's programme appears designed to ensure that distinction is maintained and to prevent ULPCs from cannibalizing sales of higher-end systems, Kay said.
Twenty or more other designs are expected to enter the market over the next six months, and Microsoft expects 10 million to 13 million of the devices to sell this year, according to the documents.
Analyst IDC's forecast is more modest: On Thursday it said it expects ULPC sales to hit 9 million units by 2012, up from 500,000 last year.
Microsoft notes that the OSes under consideration for the devices include Windows and Linux. Some PC makers have expressed a preference for Linux because it helps them keep down the cost of the devices.
Microsoft says PC makers are keen to enter the market but want to keep ULPCs as a distinct category from "value" and mainstream PCs. The company's new program, scheduled to launch by the end of June, is designed to help make that happen.
Microsoft plans to charge PC makers US$26 (£13) for Windows XP Home Edition for ULPCs sold in emerging markets such as China and India, and $32(£16) for those sold in developed markets, the documents show.
PC makers who are eligible for its Market Development Agreement, however, can get a discount of as much as $10 off those prices, the documents say.
That's where the hardware limits come in. Besides limits on the screens and hard drives, to be eligible, the systems can have no more than 1G byte of RAM and a single-core processor running at no more than 1GHz.
The programme makes an allowance for some chips, including Via Technologies' C7-M processors, which run between 1.0GHz and 1.6GHz, and Intel's upcoming Atom N270.
By offering Windows XP Home Edition at bargain prices, Microsoft hopes to secure its place in the ULPC market and reduce the use of Linux, according to an official at one PC maker, who asked not to be identified because he was not authorised to discuss the programme.
"[Low-cost PC makers] have made some good inroads with open-source, and Microsoft wants to put a stop to it," the official said.
The official did not seem opposed to the program. It should stimulate more competition between Windows and Linux in the ULPC market, and it could invigorate sales because consumers who want an easy-to-use PC are likely to prefer Windows, the official said.
Microsoft has said it plans to stop selling new Windows XP licenses after 30 June, but it has made [exceptions], including for the use of XP Home in ULPCs.
« prev article | more hardware news | next article »
Advert
Email this article to a friend or colleague:
PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.
- This article is now being printed.
What are your views on this subject? Use the form below to post a comment on this article up to 1000 characters.
Click below to add 'Microsoft U-turn to stop Linux dominating ultra low cost PCs' to your blog.
If you do not have a ComputerworldUK Account and would like to use this feature, please Register.
If you are a registered, logged-in user, this will post the title and first paragraph of this story to your blog to share with your readers.
Newsletters
Our Daily & Weekly Newsletters highlight breaking news, vital issues, expert analysis and solutions to help you stay ahead of developments in the industry.
WHITE PAPERS
-
Gap Analysis: The Case for Data Services
A data service approach makes data access and integration scalable by streamlining development and maintenance, whether applications speak Web services, SQL, or both. -
BPM, SOA and Web 2.0: Business transformation or train wreck?
Organisations must not only promote change from within, but they must also be agile enough to quickly adapt to evolving markets, policies, regulations, and business models. Fortunately, the convergence of a trio of technologies and business practices—business process management (BPM), service-oriented architecture (SOA), and Web 2.0—is providing a solution.
Comments received
smerball said on Saturday, 10 May 2008
will somebody please keep microsoft away from me? i do NOT wish to use their products any longer. i will not buy a microsoft computer.
Batt Ding said on Saturday, 10 May 2008
M$ has good reason to be afraid of Linux, in the end, open source is going to win.
JB said on Saturday, 10 May 2008
Hmmm, M$ will "offer PC makers steep discounts on Windows XP Home Edition"...or they could use Linux, which is, of course, free.
Go Linux!
Alex Chejlyk said on Saturday, 10 May 2008
So who loses in this deal? We, the end users do. MS is trying to limit what we can purchase by strong arming the PC makers. By strong arming, I mean MS will use their dominate position to force PC makers to adhere to MS rules or else... Imagine if MS raised all Windows OS prices for one particular non-adherent PC maker. It would force the PC maker to raise prices. The adherent PC makers would still get the lower price, thus offering the same PC for less. Does anyone else see what is wrong with this picture?
We've seen the the Asus EEPC costs less in Australia with Windows XP home then with Linux. Linux is free, so how does that work? Ethically it wouldn't, but MS must be offering 'incentives' to make their products less expensive. Most likely less expensive, means less expensive because we (MS) won't raise all our prices to you Mr. PC manufacturer.
If I'm forced to buy these units with Windows, I will video the whole box opening process, disagree to the MS eula and look to get my mon
IC said on Saturday, 10 May 2008
OK... So the laptop makers give the linux machines better specs.
That kinda makes XP look limited. To me anyway.
Randy Zagar said on Saturday, 10 May 2008
I've personally run full versions of Red Hat and Fedora Linux on 700 MHz Via C3 processors with 512 MB of ram. And I could easily run with less, as I can easily remove the parts I don't need. It's always been easier to fit Linux on low-end hardware than Windows. Microsoft cannot win at the low end.
Atom L. Bomb said on Saturday, 10 May 2008
smerball I like your comment and I'll add to it. Influenced by Bill Cosby. Microsoft, Will you stop touching me, you stop touching me, stop touching me, hey mom, they keep touching me...
At some point I hope to get some extra cash to get an eeepc but I hope I can still get one with Gnu/Linux on it, if not I'll probably put it on there.
Humanoid said on Saturday, 10 May 2008
Is there a court anywhere now that wouldn't agree that MS is a criminal organization? It is exactly this sort of strong-arming by a huge monopoly that gets MS fined by the EU. When will the EU and other countries finally just shut them down. I have no use for MS; but they're a dangerous annoyance. Like any disease, it should be killed off so we can get on with life.
dbmuse said on Saturday, 10 May 2008
Microsoft is a monopoly. They continue to Abuse their position. Remember they are convicted criminals. Everyday there is another reason to avoid their Distruction of Innovation and Competion.
SA Tech Blog said on Saturday, 10 May 2008
This is just more proof that M$ is more concerned about the bottom line than the end user. Why not just develop a product for these machines instead of offering an old product on a limited platform?
Larry said on Saturday, 10 May 2008
While I am a user/supporter of Linux and don't use WinDoZe, let's face the facts. Too many average consumers are just not interested in running Linux. I gave up trying to offer Linux to my friends a long time ago. I also don't fix their computers anymore either without charging them. At least with them reloading Windows, they will be able to get paid to bundle all kinds of crapware to drive the cost of the machine to be less than Linux. They will sell more, and the prices will go down. Then we can buy it cheaper and use Linux. Keep the COA for if/when you sell it. We all win. And I get to make money fixing the average customers computer. While I despise M$, it keeps me in business.
Doug Webb said on Saturday, 10 May 2008
I hope the hardware manufacturers are bright enough to see that crippling their hardware so it can run a crippled OS will just result in crippled sales.
Luis said on Saturday, 10 May 2008
While MS's behaviour is as slimy as ever it was to be expected. Still, I cannot stop thinking that this might be the first time that linux actually threatens Windows dominance on the desktop/end user so hard as to change their strategic plans (kill XP). That is good, MS is feeling the heat of competition un the desktop for linux and apple for the first time.
Sir Spammenot said on Saturday, 10 May 2008
I just want to apologize for Microsoft's actions. Even though it is an American company, it's decisions do not represent Americans in general and certainly not my values or wishes.
It is, however, our firm belief that all enterprises should live and die on their own merit. We just have to give Microsoft's management team time to exhaust the company cash reserves (coming along nicely BTW) so they can test themselves against the rising tide of real choice in the market place.
whitespiral said on Saturday, 10 May 2008
So MS is admitting that:
1 - Ultra Small Computers is a bussiness that will be HUGE.
2 - That Linux will eat their lunch in that segment, unless they do something DRASTIC.
Two reasons to celebrate.
Oil Man said on Saturday, 10 May 2008
MS is worse than the oil companies. They raise the price of oil at their leisure whenever they can. That was before Linux. Today is even superior than Windows and all for free as in beer and Freedom. MS is buying itself a little time and it wont be long before they collapse under their own weight.
MS sees the writings on the walls and consumers are becoming more enlightened. As Lincoln said, "You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."
Oil Man said on Saturday, 10 May 2008
MS is worse than the oil companies. They raise the price of oil at their leisure whenever they can. That was before Linux. Today is even superior than Windows and all for free as in beer and Freedom. MS is buying itself a little time and it wont be long before they collapse under their own weight.
MS sees the writings on the walls and consumers are becoming more enlightened. As Lincoln said, "You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."
Oil Man said on Saturday, 10 May 2008
Those who are fools or want to stay fools, deserve what they are getting.
littlenoodles said on Saturday, 10 May 2008
Unless MS is now committing to selling/fixing XP forever, this is a bad deal for the makers of these ULPC's. Where's the future? Presumably, once this current Linux threat is thwarted, the XP licensing will be dropped. Unless Microsoft has some kind low-resource variant of Windows 7 in the works, relying on XP is a dead end.
LS said on Saturday, 10 May 2008
The consumer is used to XP, so what? Anyway Linux is making great progress. In the end they wont be able to stop superior Linux technology. I believe the Eee is just a glimpse of the possibilities. Once Ubuntu or other gets a similar market shot it will thrive.
Daniel said on Saturday, 10 May 2008
So since Microsoft can't compete with Linux on the low end, they are strong-arming manufacturers into using Windows? And removing any chance of Linux superiority in small devices from spreading to larger devices?
How is this legal? They are using their monopoly to force competitors out of the picture.
Daniel
Dave said on Saturday, 10 May 2008
Humanoid said "I have no use for MS; but they're a dangerous annoyance. Like any disease, it should be killed off so we can get on with life."
You mean they are a cancer?
GrumpyOldGuy said on Saturday, 10 May 2008
To the people who are complaining that Microsoft are "strong arming" manufacturers or preventing people from getting Gnu/Linux, I say "BULLSHIP".
They are NOT stopping Asus or anyone else from shipping Gnu/Linux versions, they are just dropping the price of XP Home. They are NOT saying that manufacturer can't make a Gnu/Linux version, and in fact Asus IS continuing to sell the Gnu/Linux version with better hardware than the XP version gets.
The end result is that the consumer has a CHOICE of XP or Gnu/Linux. Freedom for the consumer means the CHOICE of FOSS or non FOSS. For the consumer more choices are better than fewer choices.
I personally love Gnu/Linux, but I am NOT religious about it and do NOT feel I have the right to tell someone else they have to use it. The fact of the matter is that most people ARE better off with an operating system they are comfortable with and that runs the software they want to use.
I'd love to see ULPCs that run Ubuntu, Fedora, (insert favo
Red said on Sunday, 11 May 2008
Microsoft is outdated. They have a terrible operating system with Vista, and Windows XP Home edition is useless. I myself have already switched to Linux and it is the greatest improvement I've experienced.
Rick said on Sunday, 11 May 2008
When Linux can run my audio and video software, then we'll talk. Right now there is no alternative to mixing and editing multitrack audio and HD Video on Linux. Still waiting..
James R Brown said on Sunday, 11 May 2008
The documents detailed in this story would be of serious interest to the regulatory authorities in Europe, and the UK. Please turn them over to the European Commission, as they could be important evidence in the ongoing investigation in to Microsoft's abusive and corrupt tactics.
MikeUSA said on Sunday, 11 May 2008
I am appalled at:
"Microsoft will charge $26 for XP in emerging markets such as China and India and $32 in the United States..."
Thats BULLSHIT. It is those 2 nations that are stealing programming jobs from American programmers and why the hell do they get cheaper software. Doesnt matter if its crippled. They're getting paid and we're getting LAID OFF. F*cked and our trousers arent even coming off!
max stirner said on Sunday, 11 May 2008
another attempt to force people to swallow inferior software for monopoly profit - say NO
try linux - be free!
Shadow said on Sunday, 11 May 2008
Actually, it's more insidious than microsoft seeing umpc's as a big market. They see it as that, but not one they wish to profit from. as that would mean they'd actually have to make a non-bloated OS, ie, actual work out on a platform they would like to not support. So in essence, they want UMPC's to die with windows XP. Try to muscle UMPC makers into using windows XP exclusively, a dying OS, with no real alternative from them, and want UMPC makers to cripple their hardware so the computers can never handle a system like vista. They dont want it, and they dont want what they percieve as competition to have it. They want it gone. They have Vista to push on everyone, and UMPCs interfere with that. Especially given the fact you can have all the pretty 3d effects on one with Linux.
It's about maintaining control without actually having to bother with coming up with new ideas.
remember, this is the same company that said the internet would never take off, and tried to resist it becaus
Michael said on Sunday, 11 May 2008
This is ridiculous. I hope someone takes action soon against these crooks. This trying to force people to use one product and influence hardware inside of computers is the actions of a monopoly. Microsoft will ~never~ win against open source, especially as it becomes more powerful and capable. The more I use my Ubuntu system, the more comfortable I am with Linux as a whole. If we could just get companies to work across all three platforms (Macintosh, Linux, and Winodows), I think the PC market would see a fair shot for all of them... maybe. Recently I've been seeing a big surge in Mac users. As soon as people stop being afraid of change and learning a new operating system. we will either see Microsoft ride off into the sunset, or merge with someone, I think they have too much pride and greed for that though. I've been dealing with Linux for the past six years or so and I can safely say that compatibility on all levels has increased exponentially.
Tux said on Sunday, 11 May 2008
I agree, Microsoft is screwing over end users that don't know any better than "OOOO its shiny and in my price range." Sadly enough, many people know about this much about their computers, its almost as though they expect it to be slow :/ The truly sad reality is that Microsoft knows this and is exploiting it.
Jack said on Sunday, 11 May 2008
I'm a PC Tech at a major US retailer who AVOIDS selling MS Windows or any non-free software to customers. Retailers & the PC industry need to wake up and take advantage of Linux/free software instead of being Microsoft's b1tch. I'm doing perfectly fine selling Linux/Free software to customers and making the company I work for more money as a result. Not that I'll ever get any credit for it or deserved compensation. The services I provide are almost pure profit in comparison to selling non-free software + services. I can easily sell more over priced services when the software is without cost & free.
BubbaT said on Sunday, 11 May 2008
If MS does not want to sell a non crippled version of XP, I am sure that people will find XP just as good--actually better.
Vincent Corleone said on Sunday, 11 May 2008
Thats a real good Step from MS. :)
ULPCs with Touchscreens MUST use Vista or Linux. Vista sucks a lot with Ressources.
So there is no alternative for Linux.
Thanks a lot MS
tachyio@gmail.com said on Sunday, 11 May 2008
Hey we should start a laptop blog that features ONLY laptops that come with NO operating system or just some flavor of linux. I've noticed in shops that if I can buy a computer with NO Windows Vista or XP on it, the price is 300USD LESS! Which is amazing! Further more, a blank computer allows you to run anything on it without all kinds of M$ crap!
Anyone interested? We could try to compile a blog of non-M$ laptops and desktops :)
Ace said on Sunday, 11 May 2008
MS is not a monopoly. They are a business that is losing market share. When any business loses market share for a particular product or product line it must find additional markets to sell to. This is what MS is doing. When any business tries to penetrate a new market they give the product away for less and they offer (when they can or need to) incentives to buy.
It's just business people. Relax.
Chandru said on Sunday, 11 May 2008
@MikeUSA
Hi,
I have a solution for your problem. A senior programmer developing business solution for US clients in India earns around $1000 a month.
So promise your employer that you'll work for $1000 a month too. That will save your job. If all American programmers follow suit it may totally stop outsourcing. :)
Chrishas said on Sunday, 11 May 2008
Isn't this illegal?Like trying to push a monopoly like they did with Internet Explorer?
Len M said on Sunday, 11 May 2008
I have not seen anyone anywhere comment on the fact that by bundling Directx 10 with Vista Microsoft is hamstringing the gaming community. That is where the real monopoly is. Buy my bloated OS or don't get the full use of the abilities of the graphics card you just paid for.
Fortunately, gamers have rejected Vista. This however leaves game developers in limbo.
Len M said on Sunday, 11 May 2008
I have not seen anyone anywhere comment on the fact that by bundling Directx 10 with Vista Microsoft is hamstringing the gaming community. That is where the real monopoly is. Buy my bloated OS or don't get the full use of the abilities of the graphics card you just paid for.
Fortunately, gamers have rejected Vista. This however leaves game developers in limbo.
VoiceOfTruth said on Sunday, 11 May 2008
The installed seat has value. That value to MS exceeds the cost of the base OS. PC makers are fools if they agree to this. They should realize that MS should be willing to provide the OS for free or pay to have it installed.
Eliezer E. Varags said on Sunday, 11 May 2008
"consumers who want an easy-to-use PC are likely to prefer Window"
That is a very convenience comment from a company that dominance OS market.
There is no more complexity on using Linux for first time than it was using Windows or MAC for first time. People said Linux is difficult, because they have to install it they self, while Windows an MacOS come pre-installed. IF vendor increase their Linux pre-installed offers, that will change. It is just no fair. Why not give Vista and a cutting edge Linux distro a lets a no-savy user to install it it-self. What would be the results?
Omar said on Monday, 12 May 2008
Will the average consumer realize that there are significant hardware differences between the XP and Linux versions? I can't imagine any of those XP machines doing much with the current FW & AV programs, unless there are going to be stripped down versions of them too.
MikeUSA said on Monday, 12 May 2008
I am appalled at:
"Microsoft will charge $26 for XP in emerging markets such as China and India and $32 in the United States..."
Thats BULLSHIT. It is those 2 nations that are stealing programming jobs from American programmers and why the hell do they get cheaper software. Doesnt matter if its crippled. They're getting paid and we're getting LAID OFF. F*cked and our trousers arent even coming off!
You can remove this message but you KNOW its true and can not simply ignore it.
Peter said on Monday, 12 May 2008
Been much discussion for years when Linux would be ready for the desktop, and what 'ready' means. With Microsoft offering these discounts, I guess at least one interestd party has decided it is now.
Joe said on Monday, 12 May 2008
@Chandru
Have you tried to live in the USA on 12000 a year?
For a full time employee it is 5.77 an hour, I believe that is less than minimum wage here.
Chandru said on Tuesday, 13 May 2008
@Joe
But the best way to stop lay off is to reduce cost of your employers. If not, then there is no way outsourcing can be controlled as necessary skills are available at a much lower price tag in China and India.
terry lechecul said on Tuesday, 13 May 2008
XP was released in 2001 so that's some cutting edge technology youre gonna have on there.
Its fun to see Redmond run after its own tail like that. Vista is meeting resistance, retailers want XP, theyre gonna stop XP, then an extension, now a bargain bin price for an 7 year old OS just so they can try to cut off an OS which is free, always up to date,with cutting edge technology yet very green in the sense that old hardware is kept longer. (I run xUbuntu on my faithful T21)
Daeng Bo said on Tuesday, 13 May 2008
Luis said:
"While MS's behaviour is as slimy as ever it was to be expected. Still, I cannot stop thinking that this might be the first time that linux actually threatens Windows dominance on the desktop/end user so hard as to change their strategic plans (kill XP)."
No, it isn't. The first time was in Thailand, when hundreds of thousands of low-cost Linux desktops were starting to be distributed. MS broke their "One price around the world" policy and created the Windows Starter Edition ($5) to stop the proliferation.
garyvdh said on Tuesday, 13 May 2008
Asus and the other UMPC makers have already shown us that they are determined to give Users what WE want, not what Microsoft thinks we should have. The Asus EEE pc is proof of that. Don't worry. MS is on the back foot and fighting hard to retain their position in the market, but times they are changing and the PC manufacturers are soon going to be calling the shots on behalf of the consumers, not Microsoft! Market Forces will dictate this! ;)
Jos Collin said on Friday, 16 May 2008
I will use Windows if the discount is 100% and the entire OS source code is provided with it.
jarson said on Sunday, 18 May 2008
Funny how Microsoft keep thinking about new way to shoot themselves in the foot those days. Way to go Microsoft, keep on the good work.
Dan said on Monday, 30 June 2008
Who cares if Microsoft wants to sell their software for less money? That means they will make less money per computer.
Many companies are starting to offer linux distributions because customers WANT linux on the computer and not anything else. It's not just a way of saving money or being cheap.
For me personally as web applications have become full featured and fast, I have started to use much of my tools online so operating system is becoming more and more pointless.