Microsoft sets limits on low-cost Windows PCs

Artificial limitations are being imposed on some forthcoming low-cost Windows PCs, according to documents Microsoft has sent to PC builders. Although the company plans to offer a sharp discount to ultra-low cost PC (ULPC) builders on the price of Windows XP Home, in order to foster the adoption of Windows over Linux on devices like the Eee PC, vendors are being asked to limit screen size to 10.2 inches, and hard drives to 80GB. Furthermore, no qualifying ULPCs with XP will be allowed to have a touchscreen, more than 1GB of RAM, or anything better than a single-core processor running at 1GHz, except for certain chips like Intel's Atom N270.

The reason for the restrictions is said to be Windows Vista, as Microsoft does not want ULPCs reducing demand for more conventional computers equipped with its newest OS. "It allows PC makers to offer a low-cost alternative, and it prevents eroding of pricing and margins in the mainstream OS market," comments analyst Roger Kay of EndPoint Technologies Associates.

Microsoft's new marketing scheme is launching in June, with prices based on the relative wealth of a computer's market. For systems sold in First World countries, XP Home will cost $32; in poor countries such as China and India, by contrast, the OS will cost only $26. The deeper discount comes into play with the additional Market Development Agreement, which can drop the price another $10.

Filed under: computers, software
Other story tags: Microsoft, Windows