Microsoft's complex Netbook dance
With Windows 7, Microsoft has done the technical work to make the operating system work on Netbooks, but the low-cost laptops still pose a challenge to the way Redmond does business.
As the only fast-growing part of an otherwise sluggish PC market, Netbooks are clearly a product category that Microsoft can't afford to ignore. At the same time, computers selling for only a couple hundred dollars don't give Microsoft the opportunity to get the kinds of revenue for each copy of Windows that it is used to receiving.
Microsoft is hoping Windows 7 provides an opportunity to move Netbooks up the food chain, with the distinction between such devices and traditional laptops eventually going away entirely.
"Our position is that Netbooks are small notebook PCs," said Don Paterson, a director in Microsoft's Windows unit. "The distinction that has existed around Netbooks is, to some extent, a creation of the industry's mind."
Although it will offer a low-cost version of Windows 7--Windows 7 Starter--to compete with Linux to power the cheapest of Netbooks, Microsoft is ultimately hoping consumers and PC makers will pay more to get the "home premium" version of Windows Vista, which supports things like a touch screen or the Media Center interface.
"We're pretty squarely focused on thinking the sweet spot moving forward on Netbooks is going to be home premium," Paterson said. "We are going to try (to) rally the industry around that vision."
Key question
But analysts say that could be a tough proposition. The key question is whether consumers really want more bang from their Netbooks, or if they just want to spend as little as possible on a machine that can do the basics of Web browsing and e-mail.
Michael Cherry, an analyst with Directions on Microsoft, thinks that Netbooks are fundamentally about the latter.
"I think its a computer that is about price," Cherry said. "I don't think it is a computer that is about features."
That Microsoft is even in the game technically represents something of a reversal of fortunes. Microsoft has been playing catch-up since the market took off with the introduction of Asus' Eee PC several years back. Many of those first machines ran Linux, representing the open-source operating system's first big shot at powering the mainstream desktop.
At the time, Microsoft was moving from Windows XP to the far more demanding Windows Vista, whose memory and storage needs were ill-suited to the low-end Netbook. As a result, Microsoft kept around the aging XP to compete against Linux on Netbooks.
When it came time to build Windows 7, Microsoft focused on creating a product that can run on the kinds of hardware being used in today's Netbooks. Ultimately, Microsoft says that all of its versions of Windows 7 should be able to run comfortably on a standard Netbook configuration with 1GB of memory and a 1GHz processor.
Now, Microsoft would like to see what it can do as far as making some money off the machines. At the low-end, Microsoft is bringing over Starter Edition, a severely limited version of Windows that has historically only been sold in emerging markets. Machines running Starter, for example, can only run three applications at any one time.
Netbooks of the future
But really, Microsoft is aiming to make the Netbook market more like the traditional PC market, with Home Premium being the standard option. Paterson said Microsoft thinks Netbooks can evolve to handle more media-playing capabilities, the kinds of things that require Windows Home Premium.
Cherry, though, thinks that what consumers really want is the cheapest possible PC. And just the fact that Microsoft can get its highest-end versions of Windows 7 running on a Netbook doesn't guarantee a market.
"Although Microsoft can get it to run on Netbooks," Cherry said, "the economics on the bill of materials probably limits what Microsoft can make on each one."
But Sandeep Aggarwal, an analyst with brokerage firm Collins Stewart, thinks that many people are underestimating Windows 7's Netbook opportunity. In a research note this month, Aggarwal said Microsoft stands to make as much as $680 million more next year on notebooks by having a range of products that can run on the machines.
Before Windows 7, Aggarwal estimates that Microsoft was getting $23 for each copy of Windows XP that sold onto a Netbook. With Windows 7, Aggarwal said he is estimating revenue as high as $58 per unit for home premium, with Windows 7 Starter fetching around $25. Aggarwal figures that four-fifths of Netbooks in mature markets will ship with the pricier version, compared to just 20 percent running Starter Edition.
In emerging markets, Microsoft will also have a Home Basic option that Aggarwal figures will account for the bulk of sales. Even still, though, Aggarwal is assuming Microsoft will get $17 more for each copy of Windows 7 Home Basic than it did for Netbook sales of Windows XP.
Paterson said that adding more features ultimately means that consumers get a better experience and helps computer makers avoid competing solely on who can offer the lowest price.
"What's the industry's advantage in saying lets drive this thing to rock bottom," Paterson said. "What we are enabling with Windows 7 (is the ability) to try to maintain higher average selling prices...This doesn't have to be about who can get to $199 first."
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
Netbooks are never going to do any heavy lifting. They are made for the casual user for light duty efforts and the capabilites that touch brings to the netbook creates a more engaging experience.
I would prefer paying $240-$315 for this same netbook, with Linux.
I think most people want what they know. If they can spend 50 bucks more for the OS they know already, that's going to be where they jump at. Linux just isn't there yet.
Thankfully, Linux is really easy to learn these days. Ubuntu has a good graphical interface and takes very little resources, hence your little mini flies through tasks handily. Ubuntu comes fully featured too, meaning there is no need to buy Office and other feature software.
I think that we may see a viable OS offering from Google that will take off when it's released.
> for the OS they know already, that's going to be where they jump at.
> Linux just isn't there yet.
It is quite possible that most people accepts to pay 20% more to have Windows.
But some people (10%? 20%? 30%?) will choose Linux.
There are plenty of Netbooks shipping with Linux, giving Open Source advocates reasonable choices.
In actuality, I look forward to the coming 'competition' because MS will have to stand on it's mertits and value instead of hiding behind lot's of hardware like it did with Vista.
So, it's not about one OS winning, but this segement surviving the 'cool' phase and becoming an permement catagory and if MS helps it to grow and thrive, then more power to them.
which is completely ridiculous.
For basic functions like web and e-mail access, messaging etc. there's a pile of Linux distros which fit like a dream at ZERO cost.
The OpenOffice suite is a case in point.
It can do everything and more that MS Office can manage, and it's FREE!
Why a netbook buyer would even bother with MS is beyond me.
And 'touch' (who cares?) can't be far away for everyone anyway.
Let's face it. Netbooks took MS by surprise.
Yeah maybe - and just maybe - there's still a place for Windows on a desktop PC
Then along come clouds, and it's all over.
It can do everything and more that MS Office can manage, and it's FREE! </i>
Nice one! This explains why OOo3 is still stuck at late 90s functionality...they don't realize there's any more you can do in a productivity app!
I have an Asus EEPC 900 with a 20Gb SSD.
I installed OpenSuse 11.1, OpenOffice 3.0 and some other stuff that I use on it.
It now is a mighty little machine and I love it.
I don't think that oversized, overpriced or overweight netbooks will be a succes....
You get what you pay for. I just got a "Netbook" (I hate that term, it's just a small low end laptop) and got it with XP. Loaded up Office on it. It fits the bill nicely between my iphone and my laptop.
Now my laptop stays at home almost all the time, my iphone is with me 100% of the time, and my netbook goes with me on meetings / planes / trips / etc.
Why would I want to hobble my 'in between machine' with Linux?
"Aggarwal said he is estimating revenue as high as $58 per unit for home premium, with Windows 7..."
Doing the math, that would mean the price of the netbook is less than $200. They do not exist at that price yet. You are making false assumptions.
"And 'touch' (who cares?) can't be far away for everyone anyway."
Touch screen on the iphone is very popular, so it seems many people care about touch, and microsoft is the only company that has touch integrated into the OS (since XP tablet and beyond) and has done major R&D into making it better. Yes, it will cost more than linux, but it will have features linux does not. Since this is all beyond you, I suspect you will use the linux model. I'll look at both options before making my decision.
As for Open Office... NO, it can't do everything MS Office can. But on a netbook, it wouldn't really need to, would it? Netbooks aren't designed to be an office productivity appliance so I can see how open office would be suitable. I agree; I think netbooks did take microsoft by surprise.
I bought my Asus 1000HE because of the hardware features and price point it had, but dual booted it right away and Unbuntu runs circles around XP in speed and productivity on this thing. Unbuntu is easy to learn and use. And being free is the icing on the cake. Windows 7 Starter addition is a much restricted OS that can not hold up against a full installation of Linux on any netbook.
Even the less tech savvy computer users can tell when their machines slow down from the typical MS bloat. And virus/malware attacks. I can't imagine the frustration netbook users will have when their XP gets infected or slows down and they can't format and reinstall as easily as they can a notebook or pc. These same basic pc users are asking about Linux...
I know a couple of people that went to walmart, did not notice the difference in the products and purchased the Linux edition b/c it was less expensive than the windows one. When they got it home they did not have the patience to learn something new, and took the netbook back.
1) I totally agree with KTLA_Knew: Open Office has got to stop trying to play catch up and focus on innovating. Clearly people will pay for works best (e.g. iPhone). The Open Office folks should spend some time with SlideRocket for inspiration.
2) I've tried to be an Ubuntu advocate, but win7 knocks it out of the park. I would certainly pay the extra to get a win7 netbook.
1) They bought a computer at wal-mart. That's just not right for anybody.
2) They weren't smart enough to read what came with that computer at wal-mart.
3) They're impatient and unwilling to even try something before deciding they don't like it.
Please thank them for not using Linux for me. If they decide to try it and actually give it a shot one day, I'll welcome them with open arms.
By the way, you may want to let them try out Vista or Windows 7. From all I've seen and heard, the UI is fairly alien to most users.
@Super2online
Read the last line I sent to chrispix99. It goes for the 2 people you spoke about as well.
"Microsoft is ultimately hoping consumers and PC makers will pay more to get the "home premium" version of Windows Vista,"
You meant Windows 7.
"What if this..., What if that... Give up... Linux is for geeks..."
At home Julia (9) and Lorenzo (4) deal perfectly with Ubuntu.
Lorenzo turns it on, browse online games but can't type the password, so he doesn't break anything.
Julia knows everything an user needs, text, some ruby programing, login in, browsing, installing new apps, she is smart ... but still 9 y/o.
My sister in law if a Doctor, she's Phd or whatever. She was scared when I suggested to give Linux a try...
So, what is it? Inertia? The first platform have huge benefits. Once users get used to something they do not change. You keep your bookmarks for years. Remember those disk magazine, once I kept the same 6 disks for a year.. Need some information, go to Google.
Using a computer is like a ritual. You do the same thing everyday. This brings safety feelings. Very difficult to change.
The other day wifes desktop at company had to be reseted because of Viruses. We commemorated "Windows, Windows,...!" (She is a PC)
B) Sounds like she needs a lesson on what not to click on, because if you go to linux, and a virus comes out for that, you will have the same result.
(this goes for most users, not just your wife)
But as she insists with Windows at home, we just felt happy with her disgrace...
There is a lot of buzz amongst K-12 education folks about netbook affordability and the potential netbooks have for that market. I'm exploring the possibility of using netbooks for future replacement of both older desktops and older regular laptops that are used by students. Indeed, in the last few weeks we've been running a trial with a small number of netbooks in a few classrooms. The students are completing surveys and so far the response has been very favorable - little to no problems with screen size, keyboard size, and the students feel the netbooks work just as fast or faster than the other classroom computers.
The catch is that the netbooks we ordered come with Win XP Home and have to be upgraded to XP Pro. The department responsible for our K-12 networks has a policy on operating systems - XP Home is not allowed on computers that use the K-12 network (security concerns and workstation manageability concerns).
XP Home does not have the ability to join a domain. Hence you have no Group Policy control over it such as maintaining a domain service/management user account on the system or for checking for minimum security standards.
The more you *have* to do on line the more control is being seceded by the user to the vendors.
They will have to drag me there kicking and screaming. Actually I'd just give up on computing rather than go there. Computers are handy, but there is far more to life out there than a computer and the cloud and a monthly service charge to access your own work.
That means more advanced multimedia capability (better GPU, more memory, higher resolution yet small screen, etc.) That means larger storage capacity. That means more OS features, like support for touch screens, gestures, and even voice commands. Maybe even more mainstream CPUs (albeit low-voltage / low-heat versions.)
Netbook becomes a platform in its own right rather than something simply "low cost", and more people will buy netbooks as their primary (and only) system, connecting wirelessly to bigger monitors / TVs when at home.
The economy right now will delay more powerful netbooks from entering the market, but we wont be in a recession forever.
..."Microsoft is ultimately hoping consumers and PC makers will pay more to get the "home premium" version of Windows Vista, which supports things like a touch screen or the Media Center interface."
Don't you mean Windows 7 home premium?
Dvorak says that he previously shied away from Linux due to problems using it with the "overloaded" hardware that computer journalists of his stature are apparently awash in. Now, though, the "live CD" feature ubiquitous in Linux installers lets him verify hardware support prior to installation. To his surprise, Dvorak notes, "Almost all the newest hardware coming out has Linux support."
Dvorak adds, "The critical mass has been reached, and it's time everyone tried Ubuntu."
Dvorak would not be Dvorak, though, without a healthy dose of spleen. And indeed, his attraction to Linux apparently stems as much from his frustration with Windows as anything else. He writes, "I'm tired of dealing with Windows malware, patch Tuesday, and the never-ending deterioration of the OS as it clogs up like a drain in a greasy-spoon restaurant. I can't take it anymore."
Dvorak finds that even when run from an optical drive, Ubuntu is "at least as snappy as Windows." He reckons that Windows 2000 was the height of Microsoft OS achievement, but even this backhanded praise is quickly tempered by the observation that no Microsoft patch has ever increased performance. "Ever," he emphasizes.
Linux mavens may wish to soak up Dvorak's good graces while they can. If Dvorak starts using Linux regularly, it likely won't be long before the opinionated, thick-skinned writer starts cranking out amusing and (probably) deadly accurate criticism holding Linux to a higher standard.
Meanwhile, Dvorak's "come-to-Linux" essay can be found here.
http://www.pcmag.com/article2/0,2817,2342703,00.asp
Putting Linux on any piece of hardware is a big advantage actually.
Now touch interface is nice, but also can be done otherwise, in ways that do not require Windows to play nice. Ironically, I replace a Fujitsu B2130 with a touch-screen and Windows 98 with the Aspire. Same size, same basic use. And I ran it 9 years without having want of more.
Nope, I don't see Microsoft being able to leverage people up the chain, because they miss the basic reason these things are selling like crazy. All MS sees is yet another path to trying to do the same thing. All MS sees in Netbooks, are a set of issues to push against until they can make people do what they want again. Nothing more.
Go take a look at those early netbooks running Linux and let's see just how well the OEM chose to implement Linux.
My current PC, bought used for $200 more than 2 years ago, is roughly at the same level most current netbooks are at. I'm running Ubuntu 8.10 with Compiz running at full blast. I am currently running 3 IM programs, my browser, a software firewall and an antivirus program while it's doing a full system scan (I protect others from Windows viruses now instead of myself). My system isn't clogged, it's not even slowing down. I have plenty of room on my HDD and, even with the smaller amount of GBs on the early SSDs offered on early netbooks, I would still have over half the drive and more than enough RAM left over to open up even more apps, all running at full speed.
Those early netbooks for bargaining chips, nothing more. Let's see those same OEMs offer a netbook with a Linux distro set up and optimized for the hardware it's running on. Let's see them choose a distro that is easy for the customer (Ubuntu, Fedora, several others all fit the bill) and then we'll see just how many of those machines get brought back.
Let's also install Windows 7 on the same machines, have a comparison between how many netbooks running each get brought back when compared to the other.
Come on, netbooks are just large-sized powerful pocket PCs, in my opinion. Laptops/notebooks cannot go extinct since they represent the complete version of the portable PC -- netbooks do not, otherwise they would not be called netbooks.
Microsoft putting a starter version of Windows 7 is just fine for netbooks. Who wants a power-hungry OS on a netbook?
Does this article have any goal? I fail to understand why it has been written...
> Who wants a power-hungry OS on a netbook?
Who wants to open more than 3 applications at the same time? *grin*
Seriously, if Microsoft expects someone to pay for a crippled version of Windows, they are deadly wrong. They should *pay* manufacturers to bundle this crippleware into otherwise perfect machines.
Added windows, all the way to 3.11 and was happy.
Started using many different os choices because Bill Gates cheesed me off with his greedy ways, found linux and was happy....
had to own and learn microsoft os choices because i need to know them as a tech...SIGH
Windows 7 is a close runner to linux in my opinion, and so far is stable, but on a netbook what do you really need?
Small, underpowered, hard for people with big hands to use, like these paws of mine, it will mostly be used for surfing and e-mail, just like a pda, or your Crackberry.
So what real use will they be?
For a purely school-work machine, it's perfect. Yes it's linux (and one that appears to be kind of locked down out of the box - which you can get around fairly easily), but it comes with an easy interface that any child can understand. You want to write a story - click on the thing that says "write". You want to draw a picture, click on "paint". Piece of cake. Now, if you want to modify the system at all (such as removing the "games" icon, or permanently change the touchpad behaviour), then it takes a bit of time and effort to hunt down the info if you don't know linux (which I don't, though I do have enough familiarity with simple programming from years ago that I understood the concept of remarking out things I didn't want and I could decipher the syntax fairly easily).
But in terms of simply using the thing - it's perfect for simple work (and the keyboard is a good size for a child's hands). If anything, the big benefit to it not being windows is that he can't mess up the settings or install anything and it doesn't look like what he's used to playing games on, so it's easier to keep him focused on the work.
You should write an article about that!
Microsoft should *pay* manufacturers to bundle the crippled Starter edition.
- by Mergatroid Mania March 12, 2009 12:36 PM PDT
- "Machines running Starter, for example, can only run three applications at any one time. "
- Like this Reply to this comment
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- by flemeister March 13, 2009 12:01 AM PDT
- The fear that some Windows specific program may not work in Linux.
- Like this
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- by tm_anon March 17, 2009 2:38 PM PDT
- @flemeister
- Like this
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Showing 1 of 2 pages (65 Comments)I wonder how much extra programming it took to cripple this version? I sure wouldn't want it, even in a calculator. I can easly see running three or four browser windows, plus perhaps the e-mail application, but not if you're running the crippled version of win7.
MS just doesn't get it. They need to offer a decent version at a decent price, not "lets see how much we can squeeze out of the customer" corporate attitude we see so much of today.
Having read this article, if I ever do decide to purchase a NETBook, I won't even consider one with a MS o/s installed. Knowing that the low price version will be crippled, and the next better version is a full version of Vista home edition....uh, I don't think so.
Linux would do an excellent job at what these devices are used for, and Linux isn't bloated or crippled. Why would anyone even choose the MS o/s?
For me, it's because I need XP for light gaming (WC3, CS), and that's the only reason I haven't installed Linux Mint or Easy Peasy on my Eee PC. Although I might decide to take the plunge with WINE this weekend.
Have you looked up the exact games you play? I've looked through a lot of games in WINE and, from what I've read, you may end up having a quicker experience.
In other words, games tend to run faster through WINE than through Windows. At least, when they run they do.