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Microsoft's restrictions for Windows XP on ULPCs gets leaked.

In early April, Microsoft made a lot of OEM and consumers happy with the announcement that Windows XP Home would live on in ultra-low-cost PCs (ULPCs) until June 30, 2010. The rise of such low-cost machines as the ASUS Eee PC -- which primarily runs on a Linux-based operating system -- led to Microsoft's decision to offer Windows XP to OEMs past the already established June 30, 2008 cutoff date.

At the time of the announcement, the only restriction seemingly placed on the reprieve for Windows XP Home seemed to be that the operating system could only be sold on ULPCs. IDG News, however, came into possession of an internal document to OEMs which detail the full extent of the restrictions.

In an effort to protect its Windows Vista operating system, Microsoft is requiring OEMs to abide by the following rules:

  • HDDs can be no larger than 80GB.
  • The screen size for the ULPCs can be no larger than 10.2".
  • Installed memory can be no greater than 1GB.
  • Processors must use a single core and can be no faster than 1GHz. Processors which are severely handicapped by low-clock speeds (a la the VIA C7-M and Intel Atom) are excluded from this restriction.

In exchange for abiding by these restrictions, Microsoft will charge OEMs just $32 for each license of Windows XP Home used in machines sold in developed markets. For emering markets, that price drops to $26. The deal gets even sweeter if an OEM is a part of Microsoft's Market Development Agreement -- this arrangement cuts another $10 off the license cost of each copy of Windows XP Home.

"It allows PC makers to offer a low-cost alternative, and it prevents eroding of pricing and margins in the mainstream OS market," said analyst Roger Kay, president of EndPoint Technologies Associates.

"[Low-cost PC makers] have made some good inroads with open-source, and Microsoft wants to put a stop to it," said a computer OEM official who wished to remain anonymous.

As the official noted, there is no doubt that Microsoft wants to squash any chance of Linux getting a grip on the low-end PC market. There were just 500,000 ULPCs sold during all of 2007 -- that number is expected to rise to 9 million by 2012 according to IDC. Microsoft, however, is much more optimistic and says that between 10 million to 13 million units will be sold in 2008 alone.

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By isorfir on 5/12/2008 8:52:15 AM , Rating: 5
In exchange for abiding by these restrictions, Microsoft will charge OEMs just $32 for each license of Windows XP Home used in machines sold in developed markets. For emering markets, that price drops to $32.

Something fishy is going on around here...

RE: $32
By Brandon Hill on 5/12/2008 8:58:05 AM , Rating: 2
Sorry about that, it should be $26.

RE: $32
By mmntech on 5/12/2008 9:12:04 AM , Rating: 2
Lol. That does sound like something MS would do.

I still think they're being foolish with ending XP sales when it's still selling so well.

RE: $32
By 306maxi on 5/12/2008 10:01:44 AM , Rating: 2
Not having XP isn't going to be a deal breaker for most people. At the end of the day Vista is nowhere near as bad as the doomsayers say it is. There has been so much FUD spread that people just don't like it because they've been told not to. I think most people who are "forced" to buy Vista will like it anyway so it's no big deal.

RE: $32
By Suomynona on 5/12/2008 10:22:16 AM , Rating: 5
The issue with Vista in this marketspace is about whether or not the hardware is powerful enough to run Vista. It's not just about personal preference or what people are used to, it's about usability with limited resources. I agree that most people won't mind Vista with an average desktop or notebook, but it can be a real dealbreaker in this market segment.

RE: $32
By SiN on 5/12/2008 11:11:00 AM , Rating: 2
Your overrating the problem with vista and hardware. It will run just fine with a current 2.0Ghz CPU, some intergrated graphics, 2+GB RAM.

And it isn't RAM hungry, it utilizes RAM differently than XP, though i (personally) would reccoment a minimum of 2GB ram.

RE: $32
By 3kliksphilip on 5/12/2008 12:32:43 PM , Rating: 5
I'm all against turning threads into an OS war, but I have to say what I've discovered recently.

I've actually been using Vista for a while now. I can't see much wrong with it... but to be honest, there isn't much right about it either. I just assumed it was okay, but I recently went back to XP to play some Age of Empires 2, which for some reason Vista didn't like, and I'm amazed. XP is so much faster. I didn't think that Vista was slow as such (I do have a dual core, Geforce 8 series PC with 3 GB of ram) but XP runs so much smoother. Pictures and videos load up in a fraction of the time and it seems so much less cluttered.

I can get used to Vista by all means, but I have to ask the question 'why should I?'. Currently I see no real advantages to Vista. I liked the automatic error report feature, updates don't prompt your PC to turn off every couple of minutes a,d the search bar in the start menu helps a bit as well. However, Xp is so much faster in comparison. Perhaps it's just this fresh installation of everything, but I feel so much more at home. Nostalgic, maybe. Though I still prefer the XP Sound Blaster X-fi drivers. On Vista the rear speakers reverse in my headphones on Counter Strike (But are fine in every other game).

Has anybody else done the same as me? Possibly the reverse, finding Vista superior to XP?

Thanks for letting me spew out my thoughts.
Vista = okay
XP = ... maybe I'm just more used to it, but I think I prefer it. Vista is bloated in comparison and doesn't really deliver anything ground breaking. I can't think of anything much to add, but as they say, if it aint broke...

RE: $32
By mondo1234 on 5/12/2008 12:50:12 PM , Rating: 3
"Euthanize Vista" is what Wall Street wants MS to do.

RE: $32
By Belard on 5/13/2008 5:10:03 AM , Rating: 3
This is what Vista is all about. This picture says it all.

RE: $32
By Pirks on 5/12/2008 5:34:45 PM , Rating: 2
Has anybody else done the same as me? Possibly the reverse, finding Vista superior to XP?
If you play modern big-budget PC games Vista x64 is better than XP - I like the way Crysis x64 works when it can access all of my of RAM (4 GB) - no texture streaming, levels are so beautiful on Very High DX10 graphics, ahhh I gonna come again, please excuse me

Vista 32-bit? Meh, I don't undersnat who'd use that POS, well unless you have some very special x64-incompatible software (that must be business stuff or something similar)

RE: $32
By SiN on 5/12/2008 6:54:43 PM , Rating: 2
That would be because AOE you are playing was made with XP in mind, and coded around the XP graphics logic.

I would not expect a game made with XP in mind to work better on vista.

I should however find a game fully coded for vista to work on vista better than XP. I cant confirm that though, so take it as what should be expected and not what actually happens.

Graphics handling and processing is part of the system but it is not the entire system.

Loads of people feel the way you do, and currently i am still using XP, but a lot also seem to dismiss vista, when a lot don't really know much about the way it is different to XP under the bonnet. And how differently things are processed, or how the systems resources are handled differently.

Personally I find vista to be leaps and bounds better than xp. But i also wont ditch XP. My machine when i build will accomodate both OS and linux.

Lots of my lesser tech savy friends ditch vista, they say it is slow. I try to explain to them about super fetch and the way that things speed up over time. They are not as patient as me.

RE: $32
By Pirks on 5/12/2008 7:08:56 PM , Rating: 2
I should however find a game fully coded for vista to work on vista better than XP
Actually, this is the case with Crysis. Its 64-bit version is a pure concentrated orgasmic joy to play on 64-bit Vista (with a powerful enough hardware of course, 9800GTX is a bare minimum if you wanna feel it all)

RE: $32
By sexp on 5/15/2008 4:54:41 AM , Rating: 2
If Microsoft will stop supporting XP i will switch to OSX.

RE: $32
By wordsworm on 5/12/2008 10:02:20 AM , Rating: 3
I still think they're being foolish with ending XP sales when it's still selling so well.

Well, whatever helps Linux is good in my books.

RE: $32
By Master Kenobi on 5/12/2008 10:09:55 AM , Rating: 2
This will hurt Linux, not help it.

RE: $32
By wordsworm on 5/12/2008 10:49:23 AM , Rating: 2
This will hurt Linux, not help it.

What I mean is that those who wish to build their own cheap systems and sell them, but who aren't officially OEMs, will have little choice but to sell Linux. Whatever way MS wants to restrict is an area where the world's favorite free OS has a possibility for growth.

RE: $32
By mondo1234 on 5/12/2008 10:45:49 PM , Rating: 2
(But the good news is that the screen gets to run in CGA mode)
What a waste of time, there will be no optical drive, and it wont be fast enough to run MS Office (which doesn't make sense because MS Office costs more than the device).
Vendors should stick with Linux and Open Office.

RE: $32
By Master Kenobi on 5/12/2008 10:04:02 AM , Rating: 4
I still think they're being foolish with ending XP sales when it's still selling so well.

Do you really want to support 3 code bases? No. They are trying to wrap up the XP/2003 code base and move to the Vista/2008 code base. Costs way too much money to maintain that many. You will see the same phase out when Vienna is released, Vista will be phased out.

By Demon-Xanth on 5/12/2008 9:29:50 AM , Rating: 4
...yet MS would charge me $200 for a retail copy.

No wonder I'm still using 2k.

By eye smite on 5/12/2008 9:38:22 AM , Rating: 2
I find myself wishing MS hadn't made this decision, but they saw the light. Linux had a real good chance at going mainstream, and it would have put a bit of a dent in the MS camp. Oh well, hopefully it still will.

By thornburg on 5/12/2008 9:39:11 AM , Rating: 2
Given the Australian pricing, Microsoft might be paying ASUS to put XP on the EEE.

By tastyratz on 5/12/2008 9:38:54 AM , Rating: 2
restrictions are a bit tight. While I agree with them classifying the ulpc for the most part the way they did I think the 1gb and 1ghz single core restriction are a bit much. This leaves little room for growth (although its a limited timeline to begin with)
With ram becoming as cheap as it is, and same with cpu - a 1.5ghz dual core limitation as well as 2gb limitation would probably loosen up things a bit.

I could easily see MS getting mad because they start dual offerings for the same price - a 1.2ghz dual core with linux or a 1ghz single with xp - and that's a very realistic possible expectation

RE: tight
By StevoLincolnite on 5/12/2008 10:48:18 AM , Rating: 2
Well there is a way around that for a little while, there is no restrictions on using Flash memory as a type of "Cache" that could go along side the RAM.
Plus they only say you are limited to a single core processor, thats fine, so what happens if a manufacturer grabs 2 Pentium M's Ultra Low Voltage, Underclock them to around 1ghz, then you have Dual Core Performance, or perhaps use 2 Underclocked Via Isiah Processors, provided the energy efficiency remains true to what they proclaim them to be.

By MBlueD on 5/12/2008 9:30:53 AM , Rating: 3
Microsoft is engaging in anti-competitive behavior against itself!
Let's sue them...

MS just doesn't understand
By zpdixon on 5/13/2008 12:21:01 AM , Rating: 3
Microsoft thinks that forbiding OEMs from shipping XP on machines that are "too powerful" will convert XP sales to Vista sales. They are so wrong. Instead this will entice OEMs to look more often into alternative OSes (see Linux on the Eee PC).

I can't believe MS doesn't understand this.

OEM versions
By DFranch on 5/12/2008 10:55:03 AM , Rating: 2
Does this mean we should expect to see some really cheap OEM versions of XP online now. Or is MS actually going to make an effort to control the OEM versions of XP now?

By solidz69 on 5/12/2008 10:59:48 AM , Rating: 2
I think they are doing that as a way to move people into vista. If there are restrictions on what you can do or what specs you can have, why would you want to?

By mobutu on 5/12/2008 9:49:57 AM , Rating: 1
...decision to offer Windows XP to OEMs past the already established June 30, 2009 cutoff date.

Wasn't it june 30, 2008 ?

What are the real numbers?
By thornburg on 5/12/08, Rating: 0
How is tha not anticompetitive?
By Chudilo on 5/12/08, Rating: -1
RE: How is tha not anticompetitive?
By MrTeal on 5/12/2008 9:54:13 AM , Rating: 2
How on Earth is this anticompetitive? Microsoft is offering an old OS to a specific market segment at a low cost. They're not bundling it with other software, or otherwise forcing manufacturers to use it. They aren't dumping either, the cost of developing XP has long since been recouped.

This is just a company trying to establish itself in a developing market.

By Master Kenobi on 5/12/2008 10:09:29 AM , Rating: 2
It's not anticompetitive. Windows XP costs $0 to Microsoft right now. All development and support costs have long since been recouped. This is just a little extra cash in the pocket for them, on top of competing with Linux in the Sub-Laptop market.

RE: How is tha not anticompetitive?
By wordsworm on 5/12/2008 10:26:26 AM , Rating: 3
How on Earth is this anticompetitive?

Something fishy is going on in Australia with the Eee. There's no way that a free OS would add cost to a PC unless there was something fishy about it. Forcing, coercing, or otherwise encouraging the increase of price on a Linux machine ought to raise some serious red flags.

RE: How is tha not anticompetitive?
By darkpaw on 5/12/2008 11:43:05 AM , Rating: 2
There's no way that a free OS would add cost to a PC

Support costs probably have something to do with it. They can higher any old Indian call center for Windows support!

By wordsworm on 5/12/2008 12:01:38 PM , Rating: 2
Indians are pretty smart as a whole. I don't think it would take them long to find some of them that can support Linux.

By mikefarinha on 5/12/2008 12:14:02 PM , Rating: 2
There's no way that a free OS would add cost to a PC unless there was something fishy about it.

I don't know for sure but is ASUS providing support for the Eee and its 'free OS'? are they able to pawn off support to Microsoft for the Eee's that have XP on it?

When Linux has problems it isn't an easy OS to troubleshoot over the phone with the tech-illiterate.

Just a thought.

By FITCamaro on 5/12/2008 10:39:49 AM , Rating: 4
If anything, Microsoft is helping competition in the segment. Without them offering a cheap XP license, the OEMs would only have the option of using Linux which the vast majority of people do not want. So Microsoft is enabling the OEMs to offer the OS that most people prefer on these low cost systems.

And how is the ULPC against what Microsoft and Apple represent(further how did Apple even come into the discussion)? If that was a "Microsoft and Apple only care about money" insult, you fail. Microsoft often discounts its products for people. From Student and Teacher versions of Office (including their awesome $60 deal for Office 2007) to discounting their products in places like China to encourage people to use legal software.

Hopefully though increased competition from Apple and Linux will cause them to lower their prices for the majority of us. Maybe Windows 7 will finally adopt a better pricing model.

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