Microsoft tries to hold its own with netbooks
Makers of netbooks, the tiny PCs that sell for as little at $300, need inexpensive operating systems to keep their retail prices down. That means they often turn to OS products like open-source Linux.
All of this talk about alternative operating systems is giving Microsoft (MSFT) heartburn because netbooks sales are rising sharply. The world's largest software company has come to a fork in the road with its new Windows 7 products.
Does it offer the product at a low price to get it onto netbooks? Will this offend customers who pay a higher price on regular PCs?
According to The Wall Street Journal, "Microsoft Corp. is taking an unusual approach with its new Windows 7 operating system: Customers buying many of the least-expensive laptops with the software are likely to be limited to running three applications at a time and miss out on other key features, or pay for an upgrade."
The move to offer a "dumbed-down" version of Windows is brilliant. Most PC users are still used to using Windows and learning a new operating system may put some netbook buyers off. Microsoft is, to a large extent, helping netbook hardware makers by allowing them to offer the product that buyers are most likely to want at a price point that will not bump up costs.
The Microsoft action may be defensive, but it also may work.
Douglas A. McIntyre is an editor at 24/7 Wall St.