Microsoft has a challenge: Sell a Windows upgrade as a way to save money.
The company's fourth quarter Windows revenue declined 8 percent, as PC buyers opted for lower-priced netbooks that run either Windows XP or Linux, rather than the higher-priced Windows Vista operating system, which does not run on netbook hardware.
Now Microsoft is building netbook-compatible versions of its next operating system, Windows 7. The plan is to restore lost Windows revenue -- its most profitable business -- by convincing netbook buyers to opt for the premium versions of Windows 7. "The challenge for us is clearly to get the average selling price up," Microsoft CFO Chris Liddell said last week.
For users, this will mean sacrificing functionality for cost. Windows 7 for netbooks will ship with the premium versions of the software ready for installation on the hard drive. The stripped-down Starter Edition will only run three applications at a time. Customers will be able to buy an upgrade, which will reconfigure the operating system to the more powerful version.
But Intel CEO Paul Otellini told investors at a conference in San Francisco last week, "That upgrade's going to be tough." The reason is simple: Netbook shoppers are buying on price. Spending less of their cash is top priority, as consumers worry about losing their jobs or their investments in the current economy.
Microsoft's pricing plans also clash with Intel's own netbook strategy. The chip giant has positioned its Atom processor at the heart of netbooks, and create a deliberately downsized, underpowered laptop that can be sold for under $500. Asus' Eee PC 900HA sells for just under $300 online.
For many buyers, a full-sized laptop with a more powerful Intel or other processor just isn't worth the money. If netbook buyers won't spend more money on a CPU, why would they spend more on an operating system?
It'll be interesting to see what ad campaign Microsoft whips up to try to convince penny-pinching netbook buyers that an operating system upgrade will cost them less in the long run.
Comments
Microsoft's problems are even worse. This year we are going to see a number of sub-$200 netbooks with ARM cpu's. Windows doesn't even run on ARM.
NT was designed to be as (hardware) platform agnostics as possible . It has and could run on ARM or many others again if the market goes that way.
I'm sure MS have NT running on all sorts of exotic platforms in the lab... just in case.
Well, that is sort of a lie. As much as NT is made to be platform agnostics, there is quite a bit of low end code in the NT code base (as much as it is known, it could be a lot worst if you get access to the sources) that is platform pacific. How much of that is critical to the NT kernel and user-mode is unknown, and when you consider that NT has been ported only once in it's life time (to POWERPC-sans the ones used in Mac's at the time, Alpha and a few exotic Intel platforms)... you would really have to question if it's possible for MS to port Windows XP/Vista/7 to ARM (an architecture that, at best, is alien to them) in a timely fashion.
I am not saying that they can't... when pushed, MS does create some great software. But I am saying that as I see it, I don't think that they can do that right now... which says alot on how netbooks might runway with Linux and XP for a long while.
vista and windows 7 that is vista is a lie and microsoft know it i will not run vista or windows 7 if i have to i will go to linux that i do not like but microsoft needs to build on windows xp the best one yet but they will not you see i have a 5.8 gig cpu and 8 gig of memory and 500 gig hard drive and a 1tb hard drive and
and a radeon 1 gig video card vista and windows 7 are so slow and locks my computer up all the time but window s xp works great microsoft say i have what it takes but what a lie
vista and windows 7 suck they use your memory so much it locks it up all the time
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