March 31, 2009 at 12:18 pm
Microsoft is predicting that its entry-level Windows 7 operating system, the Starter Edition, will pave the way for netbooks with a price point of $200 (£140) by Christmas. Microsoft sees the price point low enough that it will all but replace current entry-level Linux-based netbooks, which it says see a “disproportionate amount of returns.” Despite this, Microsoft will still be marketing Home Premium as the default Windows 7 OS for netbooks.
Mark Croft, the Director of OEM Worldwide Marketing said: “We have a couple of the OEMs continuing down a path to be very aggressive on price. It puts the pressure on everyone. We’re anticipating opening price points to reach about $200 at least in the US market this holiday season, and another $50 maybe for Nvidia Ion machines.”
Microsoft has yet to finalise the netbook specification. “There isn’t a standard, uniform view of the world. Each OEM has nuances on this depending on what they think their brand value is, each one has a slightly different take on what they’re trying to do in terms of market share or margin,” said Croft.
“Some of them are trying to make $10 on this device or $20, and some are just trying to sell a unit and break even. Some of the OEMs absolutely have an opening price point but they really have the objective of persuading the customer that if they pay a little bit more, they get significant extra functionality, whether it’s in the hardware specification or the software and experience. No two are the same.”
Windows 7 Starter Edition will come with a number of restrictions though, the most controversial being that only three programs can be run at one time. However, if MS manages to release this at a competitive price point, maybe it will hope that the consumer will be able to weigh this negative against the cheaper netbook cost. This may deal a big blow to some of the upcoming Linux projects that are tailoring their OSes to netbooks.