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May 12, 2008

Microsoft to Restrict the OS Capabilities in Low-cost PCs

By Raju Shanbhag, TMCnet Contributing Editor

To promote the use of its Windows OS in ultra low-cost PCs, Microsoft (News - Alert) is reportedly planning to limit the hardware capabilities of its operating system, according to IDG News Service. The company plans to offer very high discounts on Windows XP Home Edition to encourage its use instead of Linux on ultra low-cost PCs (ULPCs).

The IDG News Service reports the program is outlined in confidential documents that Microsoft sent to PC makers last month.
If Microsoft, indeed limits, the capabilities of the Windows OS on ULPCs, they will allow the PC makers to offer a low-cost alternative. At the same time, because there will be restrictions on the features they offer, the company will ensure that the mainstream OS market will not be hit by the low cost alternatives.
Protecting the mainstream PC market running Windows Vista is the primary motivation for PC vendors and Microsoft alike in limiting the capabilities of ULPCs.
ULPCs include One Laptop Per Child’s XO machine. These systems already have low hardware configurations, and if Microsoft manages to impose restrictions on the operating systems too, it will leave a tremendous gap between high-end systems and ULCPCs.
Microsoft reportedly expects 10-13 million of these devices to sell this year, and twenty or more other designs are expected to enter the market over the next six months. IDC (News - Alert) has said it expects ULPC sales to hit 9 million units by 2012, up from 500,00 last year.
Of late, PC makers have been showing an affinity for Linux, as it allows them to lower the costs of the ULPCs. Even though PC makers are keen to enter the market, they want to keep ULPCs as a distinct category from “value” and mainstream PCs. The company’s new program, which is expected to be implemented in June, will try to achieve this goal.
Raju Shanbhag is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.
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