Microsoft making just $15 per netbook XP license

The two main operating systems that you will find on netbooks at this present time are either Linux or Windows XP. The majority of netbooks tend to have XP preinstalled, but in retail generally, there is a lack of options allowing you to choose exactly which operating system suits you. Some consumers would rather save money by choosing Linux and often it is very difficult to work back how much Microsoft is charging for each XP license. However a Wall Street Journal report indicates that this amount is just $15.

This has been a deliberate strategy by Microsoft to gain market share in a segment where it had just a 10 percent foothold when netbooks first started to emerge back in 2007. Fast forward to present time and this has swung Microsoft’s way, with approximately three out of four netbooks sold with XP last year.

But why would Microsoft be willing to take such a hit, especially compared to the $50-$60 it receives for bundling Vista in laptops? My thoughts are that it sees XP as a stop-gap to Windows 7 Starter Edition. Much has been made of the three application limit in the entry level Windows 7 edition and Microsoft are gambling on whether the consumer will really ‘upgrade’ to more expensive versions at some point down the line. It will be interesting to see how consumers react to this app limit and the launch of Windows 7 could even see a retaliatory Linux comeback.