Print 78 comment(s) - last by Pirks.. on Apr 22 at 12:37 PM

Customers may love netbooks, but with Microsoft forced to sell netbook licenses for less than $15, it could find its revenue falling by more than two thirds if netbooks were to continue their wild growth and come to dominate the market.  (Source: CrunchGear)
Microsoft is winning more marketshare at the expense of its sales prices

One classic debate in the computer industry is the importance of volume versus price.  A company like Apple Inc. revels in high-priced offerings, and even though its volume has suffered of late, its stock has been soaring due to its high sticker prices, as PC sticker prices fall. 

Microsoft, on the other hand, takes the opposite approach, shooting for volume despite sinking prices, something other analysts favor.  Microsoft is aiming to conquer the ultra-low and low-cost markets, which primarily revolves around the netbook and MID (mobile internet devices) industry.

After netbooks flirted with bringing Linux adoption to the masses, Microsoft quickly pounced on the opportunity, pushing copies of its lean, proven Windows XP operating system onto the market.  Today, over 96 percent of netbooks ship with a Windows-based operating system.  And the move couldn't have come too soon, if Microsoft wants to retain its dominant position.  Estimates by leading market researcher Gartner Inc. predicts that 21 million netbooks will ship in 2009, growth of 80 percent, while overall PC sales sink 11.9 percent.

What is impressive, according to a recent Wall Street Journal report, is just how low Microsoft is willing to price its OS's to stay in the netbook game.  The report cites that Microsoft is offering netbook manufacturers licenses for $15, far less than the standard OEM price of $50 to $60 per Windows Vista license.  The estimate even falls far below Microsoft typical Vista Starter Edition prices of approximately $30 per license.

Microsoft faces a real dilemma as it tries to market the Windows 7 Starter Edition to the netbook market.  Not only will it be priced higher than Windows XP, but it will have a three program limitation, which could prove very constricting.  And upgrading to a more functional Windows 7 version might be desirable but would further raise the cost.

On the other hand, Microsoft only plans on continuing to sell Windows XP licenses to netbook manufacturers until 2010.  However, when the cutoff comes in 2010, it risks losing manufacturers to Linux distributions, if it doesn't offer cheaper licenses.

Thus Microsoft finds itself in the same mess that hardware manufacturers find themselves in when it comes to netbooks.  They have created a monster, which consumers love, but one that doesn't love the manufacturers back, with razor-thin profit margins. 

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RE: Awesome!
By Reclaimer77 on 4/20/2009 6:17:50 PM , Rating: 2
Linux can do everything 90%(or more) of the users need. They just need to spend a few mins learning how to use it.

That's a load of crap and you know it. I wish you Linux guys would crawl back under your rocks and stop spewing BS. Linux is NOT ready for prime time for the desktop. I'll use your 90% BS number and tell you why, because Linux can't run 90% of the apps and games that those 90% USE.

WOW people saw a GUI that copies off Windows and thought it was WIndows !!?? Well I'm sold !! Typical Linux user, so smug and superior you think the GUI is the only reason people use Windows..

People just need to stop being afraid of Linux.

And OS is NOT a belief system. People are not "afraid" of Linux, it's just inferior to Windows for PERSONAL COMPUTING.

RE: Awesome!
By stromgald30 on 4/20/2009 6:34:05 PM , Rating: 3
I think you missed a key phrase: the users need. You can't run the exact apps, but for the important apps, there are viable alternatives that are also very easy to use, just like the OS GUI. OpenOffice, Pidgin, and a ton of other software on Linux mimics their Windows counterparts very well.

The biggest things missing are probably games, but you could say the same about any OS that isn't Windows.

RE: Awesome!
By Pirks on 4/20/2009 10:47:12 PM , Rating: 3
The biggest things missing are probably games
Games are totally irrelevant argument for netbooks.

RE: Awesome!
By theapparition on 4/21/2009 6:19:46 PM , Rating: 2
And I think you miss the key point: the users need to....

Asking the majority of tech-unsavy computer users to learn something new is the problem. Try teaching soccer mom's and grandpa's the "new" way to get thier email. You'll understand how quickly people want to avoid change.

RE: Awesome!
By BZDTemp on 4/21/2009 3:53:20 AM , Rating: 2
That is totally wrong. And by the way you do sound like the choice of OS is a belief system!

Most people need their netbook for:

- surfing which Firefox does great.
- Modest office stuff and OpenOffice will do nicely.
- Watching movies and again that does not require Windows.

It is only games and people which are force to use IE to access certain websites that makes Windows an requirement.

RE: Awesome!
By fishman on 4/21/09, Rating: 0
RE: Awesome!
By Zoomer on 4/21/2009 8:24:08 AM , Rating: 2
In actuality, I used Ubuntu for a development job and I must say I thought it let me develop faster and more efficiently.

And Amarok just rocks. Nothing else comes close.

"I modded down, down, down, and the flames went higher." -- Sven Olsen

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