Posted on 10/07/2009 6:01:19 AM PDT by ShadowAce
Ultra-low prices on portable computers are nothing new, and in fact have increasingly become the norm since the debut of netbooks — small and light ultraportables that are virtually defined by their low cost. However, there are some strong reasons to believe that Microsoft’s upcoming Windows 7 operating system, in addition to new types of Linux-based portables, could help drive profit margins for hardware manufacturers to surprising new bottoms. But is it good for the tech industry for laptops and netbooks alike to sell for fire-sale prices? And can hardware providers build healthy businesses around a new, premium-priced operating system?
“It’s getting harder and harder to sell anything over $800,” CNET over the weekend quoted IDC analyst Bob O’Donnell as saying about the portable computer market. The CNET article also notes that the price of an HP EliteBook 2530p business notebook in August 2008 was $1,500, while an upcoming ProBook 5310m notebook, less than inch thick and featuring a slick aluminum case, will be just $699. That new computer, and its rock-bottom price, will arrive with Windows 7 on the day that Microsoft’s new operating system ships: Oct. 22nd.
Windows 7 has a much smaller footprint than that of Windows Vista, and is much more adept at memory handling. It’s aimed squarely at the hot netbook market, where Microsoft has had problems with its profit margins, as evidenced in a 10-Q filing from last year in which the company pointed specifically to the market when explaining large revenue shortfalls:
“The decline in OEM revenue reflects an 11 percentage point decrease in the OEM premium mix to 64 percent, primarily driven by growth of licenses related to sales of netbook PCs, as well as changes in the geographic and product mixes.”
Microsoft is clearly aware that the trend toward very low-cost portable computers isn’t allowing for the kinds of revenues and high profit margins that it’s used to. As PC World notes, while not all the details of Microsoft’s Windows 7 pricing strategy are in place, it’s inevitable that the company will have to charge a premium for the operating system, which could in turn force hardware manufacturers to have to keep the prices of their portable computers especially low by way of compensation.
Meanwhile, Dell is shipping the very first netbook, a $299 Mini 10v, with version 2.1 of the Intel-backed Moblin Linux-based operating system. Other netbooks running Moblin will soon hit the market, and Jim Zemlin, executive director of The Linux Foundation, was quoted at the recent LinuxCon conference as saying that they will arrive at very low price points. Only Apple, it seems, is able to maintain a healthy business selling portable computers at premium prices. And Apple won’t even play in the netbook market.
Still, despite the arrival of Moblin netbooks, Windows 7 will be the pace-setting operating system on new netbooks and laptops heading into the holiday season. In fact, as InfoWorld reports, it’s already on one in 67 personal computers in advance of its official release, due to early availability for users with volume licenses, and it has gotten rave reviews. It’s also being aggressively marketed by Microsoft.
As buyers continue to show their unwillingness to pay premium prices for portable computers, manufacturers respond to an unforgiving portable computing market and shaved margins, and Microsoft seeks to carve out whatever margins it can get for its new operating system, daunting new economics loom. In the end, we may very well see consolidation within and even exits from the portable computing manufacturing market as a result.
I am not sure how well that will work these days since Windows CDs are not usually included with computers anymore, but I am not sure it won't stop savvy computer users from buying a netbook with a free OS and the putting an existing copy of Windows on it.
And yes, I know this violates the Windows EULA.
Great idea, just skip the windows install and stay with the Linux OS.
If it wasn’t for the fact that I wanted a Macbook Pro, I would have had a laptop a long time ago. They are getting dirt cheap....would be nice if apple dropped their prices by $300 or so just to be nice (haha).
I was resistant to installing Linux all the sudo -t ./dev/src/ stuff from the terminal. I decided to read up on it and burned an .iso image of Ubuntu 9.04. I put it in my Dell laptop, booted from the CD and whacked my Vista install, the install GUI was a snap and 45 minutes later I was up able to browse the web on my wireless, use my external harddrive, get email, connect to my VPN, browse my Windows network, the whole enchilada. Love it and fast as heck. All for free, and tons of free(not stolen pirate ware) applications to do anything like open Excel spreadsheetrs, Word docs, etc. I'm a convert.
The more I use OS-X and Linux, the more I feel nausea when touching a Microsoft machine.
Windows 7 will undoubtedly be an improvement, but methinks MS is like GM - yesterday’s technology (and quality) today.
Now, the only thing I have to put up with is that awful feeling when I have to use XP at work.
Arghhhhhhhh.
Putting an operating system on a computer your own doesn’t violate the EULA.
It’s good stuff, ain’t it? I was reading about the latest release, still Beta, of Ubuntu. They changed the boot loader and it’s way faster still. Among other changes not coming to mind at this moment.
I was LOVING PCLinuxOS 2007. I’ve had some trouble with the 2009 version, and now we need all the Windows computers we can run for school apps, so I’m out of the Linux game for a while. Reinstalled the W7 RC on my Linux laptop, sigh. W7 is really good, though. I preordered the 64 bit version for my gamer machine.
I just built a new PC bringing over some of the stuff from my old one (CPU, hard drive, DVD burner, and video card). I bought a new case, Motherboard, Memory and got out the door at newegg for under $300. Hassled on the phone with Microsoft for an hour with the XP install and new hardware. Gave that up and went to Win7 64 bit. I like it quite a bit. I am also running Ubuntu on a laptop and really like it.
If I could only get Ubuntu to run Civ4 (and its offspring)and connect to my office Citrix server - it would be my primary OS and I would never look back. Unfortunately I’ve had no luck with that and cant move without those things ;-)
No man is worth his salt who is not ready at all times to risk his well-being, to risk his body, to risk his life, in a great cause. - Theodore Roosevelt
Not so great if you want to run half the software you normally use on it, like windows streets and trips.
I knew this thread would be hijacked into Linux nerd thread. I have had one technical challenge , connecting to my Office Exchange server. The version they have installed is not supported. But a minor thing. For just browsing the web, emailing, other mundane stuff, can't be beat.
On another note, not related, I recently purchased an ASUS brand PC. It is eligible for the Windows 7 upgrade. I was given a fax number to forward my proof of purchase to them.
Stupid Question:
The number provided is:
+886-2-82003668
How do I include the plus sign when I dial the number???? No plus sign (+) is on my fax machine key pad.
Thanks!
Actually I like the Win7 64 bit. Its just the hassle - i’m dreading the switch to a new hard drive and the discussion with microsoft for a new code......
It's called Garmin Nuvi.....who still uses navigation software???
Just put a "1" in front. the 886 is the area code, so it'll be a long-distance call.
It is quite a bit more than that - more in the $100 range.
If you think about it though, this is a huge amount. All MS delivers to the OEM is golden bits - either on CD or electronically. There are no other cost of goods, distribution markups, etc. If you look at other software that is shipped on personal computers, the amount paid for it is usually less than 10% of the retail cost (usually much less than 10%). MS is able to charge this large amount, then bundle products in the OS that incent the OEM’s to not ship competitive products (think Netscape here).
I just can't wrap my head around this. This is why I've never purchased a window OS beyond Win2k. Once I buy it, it's mine.
That looks like a Taiwanese number. You would actually dial it:
011 886 2 82003668
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