March 17, 2005 11:56 AM PST
In Asia, Microsoft sees slow start for budget XP
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The software giant first launched Windows XP Starter Edition, a localized version of the full-fledged Windows operating system with reduced features, in Thailand last October. The cut-rate version debuted in Malaysia and Indonesia in February.
The product has received the initial backing of more than 15 local system builders and multinational computer makers in these three countries.
Microsoft has been depending on its partners to bundle and promote Windows XP Starter Edition with their low-end desktops--a strategy that so far has been met with a tepid response.
Microsoft recognizes the distribution problems with Starter Edition and plans to tailor its efforts to suit individual countries as part of a 12-month pilot program. A major challenge is combatting piracy, which floods markets with cheap bootleg copies of Windows software. In Kuala Lumpur, for example, bootleg copies of Windows XP go for less than $5.
Unlike Microsoft's flagship Windows offerings, however, Starter Edition is not sold at retail. The company is banking on its partners to bundle and promote the software with their low-end PCs, a strategy that has so far received lukewarm response.
"We're not focused on Starter Edition," said Kharisma Shintara, director of Arta Computer Center, a computer assembler in Indonesia that has licensed Microsoft's scaled-down offering.
Shintara told CNETAsia that his primary product line will remain Pentium 4 PCs that are preloaded with Windows XP Home Edition--not the lower-end Intel Celeron machines, which Starter Edition is designed for.
"We've only used it in some projects for schools," he said, adding that the price of such Starter Edition-based PCs is around $320 (3 million Indonesian rupiah).
In Thailand, a number of Microsoft's Starter Edition partners, like Atec and Belta, are still promoting PCs that ship without any operating system.
Supreme Computer--one of the largest PC manufacturers in the country--is even selling a low-end Celeron PC preloaded with Linux for $404 (15,490 Thai baht).
The company also offers a similar system featuring Starter Edition that costs $443. Microsoft declined to provide sales figures for the new operating system in Thailand.
Ballmer: We need
a $100 PC
The Microsoft CEO says
would help stem piracy
in emerging markets.
"Starter Edition has not gained much interest from vendors, nor has it generated much interest from end users," said Martin Gilliland, principal analyst with research company Gartner Asia-Pacific.
Gilliland attributed the tepid response largely to high piracy rates. Smaller computer retailers in these emerging countries, he said, tend to buy their systems from large original equipment manufacturers, or OEMs, and then load them with cheaper, unlicensed versions of Windows.
In Malaysia, Microsoft has set the pricing of Starter Edition at $32 (120 ringgits). In contrast, bootleg copies of Windows
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