When Windows 7 is released in October, Microsoft will make the “starter edition” version of the software available in developed countries for the first time. The reason? Because the company wants to give PC makers selling low-cost netbooks a low cost Windows licensing option. Of course, we already knew that. Here’s what we didn’t know: Not only will Windows XP Home Edition still be available as an option for the immediate future, but it will be cheaper than Windows 7 Starter Edition.
That’s right, Microsoft has decided that rather than lower the price of the cheapest version of Windows 7 too far, the company would rather offer a fuller featured version of an operating system that’s almost a decade old at a lower price. On the one hand, netbook users who pick up XP models won’t get some of the newer features baked into Windows 7 and may not be able to run some newer software, you’ll still be able to do pretty basic things like, oh, I don’t know, change your desktop background by paying less money.
Microsoft still hasn’t officially announced exactly how much it will charge for Windows 7 Starter Edition, and the price could be variable since it will be sold in large volumes to PC makers. Consumers won’t be able to walk into a store and pick up a copy. But Microsoft CEO Steve Ballmer did suggest recently that the pricing scheme will go something like this: Windows XP, Windows 7 Starter, Windows 7 Home, and then Windows 7 Professional.
Ballmer also laid out some of the other details about Windows 7 Starter. In order to qualify for the operating system, a netbook will have to have a “super-small screen… has to have a certain processor,” and so on.
via Netbook Choice
Word is that Starter Edition will cost OEM’s $45-$55, and Home Premium $85. Now we hear XP will be less that $15. Does anyone really believe SE is more than three times better than XP?
And what about Windows CE for ARM, it is a much worse os than even XP and so what is it going to sell for, $5? And would you say that CE is better than a good Linux distribution?
Manufacturers and retailers are pragmatists. Substitute “more valuable to consumers” for “better.” Will consumers pay $30-50 more for systems with 7 Starter than for systems with XP? All TBD.
However, consumers flocked in droves to paying extra (or having weaker configurations) for XP relative to Linux, so it’s dangerous to assume that people will pick the cheaper (and possibly better) option when given the chance to pick a name brand they’re comfortable with.
The real question: will Win 7 become a name brand consumers will flock to?
OK, so $15 isn’t a great deal but it’s still paying for something you don’t want. Would you pay $15 extra for a MP3 player with some albums you wouldn’t buy and then just bin them? What if DVD players could only be purchased with some films “installed” that you’d never watch but had to pay for the pleasure of not watching?
Yes, most users would be baffled by a laptop or PC with no OS but what is wrong with offering a choice? For an extra payment Windows, Linux, BSD or whatever you want can be supplied/installed or you could just buy the hardware on it’s own. I’ve seen this happen in smaller independent PC shops so what is stopping PC World and the like doing the same?
I’m UK based and would like to know what offerings are available in other countries as here it’s pretty much Windows or nothing.
Check HP’s order page for the HP-5101 – –
You can get either FreeDos or Nothing at all.
Of course, that is a “Business” machine, and a
“Business” is expected to have an IT department.
Most netbooks are mass marketed. Mass marketers hate extra SKUs, because they cause stock problems and confuse the customer over which to pick. The exceptions are (1) pure preference, like making an item available in multiple colors, and (2) price tiering: give people an option between cheaper-and-worse and pricier-and-better.
An OS isn’t a pure preference case like picking a color, because it has a real impact on how you use your computer. And it isn’t a price tiering case, because the differences between OSes are confusing and nebulous to consumers, unlike the difference between a 160 GB HDD and a 320 GB HDD, which is clear cut.
The third exception, of course, is brand diversity — I can buy Tide, or Cheer, or All (detergent brands in the US), or some other discount brand based on what I like. This is where Linux could potentially fit in. The reason it doesn’t right now, is that people see the brands as HP, Dell, Toshiba, Apple, etc. People buy OS X because they’re really buying an Apple computer, and they know who Apple is and trust them. Adding a second layer of choice — manufacturer, then OS — is confusing, so retailers don’t like it.
Another analogy: consider if you were buying a car, let’s say a Honda Civic. If the Civic comes with two engines and one is better and pricier than the other, no problem, right? You either get the cheaper one or the better one. But suppose they have two different engines that are the same price. They’re pretty similar, but one has a little better torque and better gas mileage, while the other one has better horsepower and is known to be somewhat more reliable. That’s confusing as hell, isn’t it? Which do you pick? In fact, it’s so confusing that many people might end up buying a Toyota instead, just to avoid making that choice. That’s why no car manufacturer in their right mind will give you that choice. Forcing most people to choose between OSes directly gives them that kind of choice, because they don’t understand the differences and they don’t understand which is clearly better.
The flipside to mass marketers is that in indie shops — your example — this is a great idea, and more shops should do this. Indies can afford to educate the consumer and to sell things tailored to niche enthusiast markets (i.e. people who actually understand computers). Dell is another great use case — their whole business model has traditionally been about empowering customers to make decisions about their custom-built systems, so choice of operating system feels right at home, and they supposedly do pretty well with Linux systems.
Linux was the default when Netbooks first hit the market. The return rate was alarmingly high as people just assume a computer comes with Windows regardless of what it says on the box. Lowest common denominator.
It will be interesting to see how this plays out in the marketplace. Clearly Microsoft is hoping that customers will vote for 7 with their feet, so manufacturers will all end up licensing the new version anyway.
But it’s a step in the right direction that they’re not forcing anyone to make the switch.
No, it is a sign the OEMs aren’t playing monopoly anymore. That is what waving the Penguin banner got them.
Now for the first time ever we will get to run the experiment and find out if customers actually want to pay a premium for the latest Microsoft offering. In the past whenever a new operating system shipped the old one was removed from the normal consumer markets so there wasn’t a choice, as hardware churned all customers got upgraded.
Any financial wizards reading along?
Ones with great look-up skills?
I have always wondered how much MScorp has invested in
I.E: Is it in their own interest to make computer owners
buy the newest silicon/memory?
Are they driving the hardware churn for their own benefit?
Nay, don’t bother looking – the only public information is June99 –
Short term investments are 1/3 of their total assets.
Somehow I don’t think that is stock in Canonical Ltd.
June 2009 – sorry for the typo.
Intel is the biggest driver of hardware churn. If people don’t all wish they had the coolest processors out there, their product mix can start leaning toward discount CPUs, which hurts their margins.
Back in the 90s, for example, they were one of the biggest early drivers of digital video codecs — the file structure of AVI and it’s support for pluggable codecs comes from Intel.
They got into chipsets, then motherboards, to try to make systems that would perform better (and support high-speed CPUs), and they got into making GPUs so that every system would be shipped with one, even if they’re not that great.
Their capital investments arm has also been active. Basically, if you’re a startup developing something that will encourage high CPU utilization, Intel Capital wants to be your friend.
By contrast, Microsoft’s traditional role is to come out with new software releases that people want to have — whether it’s the OS, Office releases, or other apps. So Microsoft has not traditionally needed to worry about supporting hardware churn through other means — they support it just by releasing new products.
It’s only been since XP was released that Microsoft has moved from a driver to a beneficiary of system churn, and I’m sure they’re hoping to change this back when Windows 7 comes out.
< they support it just by releasing new products.
This is just what I've thought all along. Economic facts and data aside, it seemed obvious for most of the last 20 years that software and MS in particular, getting ever more ponderous, forced people to clamber for ever faster and more powerful hardware just to keep things operating, not to mention one-upping the Joneses.
Software and hardware development seemed to be feeding off each other, with software especially seeming to drag hardware along. On the plus side, this obviously played a big role in the amazing fast development of new hardware technology and standards. And I guess we've recently seen the negative side come home to roost, with bloated and, I suspect old programmers might say, inelegantly written software.
It’s also worth remembering that lightweight Linux distros like DSL use the 2.4 kernel instead of 2.6 to keep the resource requirements down, because the newer kernel is bigger, and doesn’t run well on older machines. And the original Linux kernel back in the early 90s ran fine on 386s and 486s, whereas the current one certainly wouldn’t. For that matter, if you compared the memory and processor usage of Firefox 3.5 to 1.0, you would see a significant difference.
It’s not just Microsoft, and it’s not just bad coding — when you add features to software, you add resource consumption. It’s really that simple.
The ever-increasing base performance of hardware enables developers to add new features to software, which, in turn, feeds demand for better hardware.
Of course, even counting all that, Microsoft’s software tends to run heavier than Linux and other open source software, but the principle is basically the same.
When he makes that price line-up read:
Win-XP, FreeBSD, Linux, Win-Starter, …
Let us know.
It’s worth remembering that at something like a $15 unit price, you’re not exactly enriching Microsoft by buying a netbook with Windows XP on board. So if the model you want doesn’t ship with Linux (or BSD or whatever), it’s a shame, but it shouldn’t be that big a deal.
It’s not that big a deal in terms of the money you spent, but instead of throwing $15 away for an OS I won’t use I’d prefer no OS at all and freedom of choice what I want to install.
Manufacturers and retailers are afraid of systems with no OS, because most users have no idea what to do with them when they get home. That increases the return rate, which probably increases the cost of the system more than just slapping XP on there would.
A model like that can work for sellers that know their target market will be technically savvy, but not for the mass market.
The only clear solution is to increase positive brand awareness of Linux (or perhaps Ubuntu in particular) enough that customers feel comfortable that they know what to do when they take those systems home and run them.
That’s certainly a valid point. It’s still annoying that people who want to run an alternative OS on up to date hardware either have to buy a Windows machine and install Linux or something else on it or find a niche vendor that provides more choices.
I agree that there is alack of positive brand awareness of Linux which is very often a problem with open source software as their is a strong tendency not to focus on marketing.
From a user experience point of view Linux is ready for a bigger share.
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