Microsoft plans to use Windows 7 to raise netbook prices - Page 2

http://www.appleinsider.com/articles..._by_apple.html

Guess i'm not keeping up. We'll that's probably because all these new iPhone iPod touch users and switching to Apple. but I haven't read any article yet, just a guess.

Well it's a fairly interesting and specific fact. If you're hearing it for the first time you'd naturally ask for a source.

It surprsied me too. I understood Apple was doing very well in the Premium end of the market, but not this well.

Camroid, it's relevant.... enough. Every pundit and their son has been claiming that Apple should be in this bloody Netbook Market. After this statement and Microsoft's financials it's pretty clear that this market contains some downsides.

All the rumours about an iPad_Slate_Tablet_Whatever can't all be true... but informed and reasonable opinion is that something new is going to be coming out of Apple. My guess is that Jobs and Co are hoping to turn the netbook market on it's ear.

Google have also recently thrown their hat into this ring. I think the next two or three years could be verrry iiinteresting.

If we can debate about spy shots of iPhone covers why can't we debate about netbooks?

Dude, when this becomes your website, you can decide what gets posted. Having said that, when you see an article that you don't think has any relevance to this site, you can just not click the link, not read the article and not worry about it at all. Telling others what should or shouldn't be written will only fall on deaf ears and not change one thing.

...it has been reported, first by Joe Wilcox of Microsoft Watch that NPD reported that 91% of RETAIL PC sales revenue in the US were Apple's. He compares this to last year when NPD reported that Apple was only 66% of this segment. He gives some explanations as the ASP, average selling price, for PCs have dropped considerably due to netbooks, etc. I'm sure you can google it.

Last year Apple had a recorded 66% of the $1000+PC market, and even that seemed high back then. You have to understand that each $50 or $100 the percentage will fall drastically as the average PC price is about $700-800 by last estimate. But if we forget about unit share, for the entire PC market Apple has stated that they take ⅓ of every dollar for every PC sold. That simply means that those cheap $400 PCs which sell like hotcakes yield very little actual profit for their respective companies, yet they cant easily lose that little market to their competitor. Its not a place for them to be, especially for Dell who cant seem to beat HP on any level.

So now we're seeing the other shoe drop. The downside of getting involved in netbooks. This is what everyone's been saying all along.

And while companies like Microsoft, ASUS, MSI, Dell, HP, etc. are scratching and clawing for their share of the increasingly saturated netbook market - investing R&D and money into an area the yields very slim profit margins to begin with - Apple is steadily and comfortably increasing their share of the top-end market.

Meanwhile, Apple continues to innovate and the others seem to be playing "follow the leader" - and playing very poorly.

I don't quite understand what you are getting at. You said something similar on the other Balmer thread.

MS make their money from the software not the hardware. They might earn the same money from a $600 HP as they do on a $2000 Dell Adamo. (Best product name evah!)

Im sorry to say that after being pretty impressed with windows 7 it has headed the way of previous Microsoft operating systems.

I have 7 installed on both a desktop machine and an Aspire One netbook. I have had this installed since the RC and steadily over the weeks both the desktop and netbook have become slower and slower. I notice this on the desktop which only runs Outlook and Office. I have cleared caches etc and defragmented the drives but it is becoming sluggish and is prone to random 'lags' in daily use.

As with Vista it started off well but after a while it too slowed down.

I have since reinstalled 7 on the desktop and it is running quickly again but such a difference in only a few weeks is not a good sign. The netbook is going back to XP Pro which runs fine on it.

I have to keep testing 7 on the desktop as more of our clients will inevitably be picking up new laptops with 7 on over the holiday season.

Sure, np.

This is what has Microsoft acting so defensive: Windows still has overwhelming unit sale market share, but it is now almost entirely at the low end of the market.

Sounds like the same old system. Flashy OS Stacked on top of the house of cards that is the Registry. Scary!

Huh? Microsoft has been the devil we have known for over 20 years now!

So, for all the time that Microsoft has been claiming that Macs are overpriced, it turns out that Windows has been priced too low to maintain a profitable business?

It'll be interesting to see where prices are a year from now...

Well Prince's prose might be labouring the point a little.... but there is a point.

Microsoft doesn't like selling a dirt cheap version of XP for netbooks. The OEMs (apart from maybe Acer) aren't that keen either. Selling low price, low margin netbooks that cannibalise ( a little!) hasn;t done much for their bottom line.

There has even been some negative feedback from some consumers, disappointed with the capabilities of these machines.

So, with some higher specs and a better OS perhaps folk might not find it a problem to pay a few dollars more. Everybody's happy. Even Apple! And that is Prince's point because if they enter the market the price differential (and there will be one!) won't be as large.

Sure, but my point is ... do they care? Even people buying PC systems for under $1000 are still buying Windows.

And I wouldn't put too much importance on those NPD figures. It's US only. Retail only. I am not saying the figures are wrong... it's just that it's the HPs and Dells that are affected more than Microsoft. It's still good news for the Apple train.

Besides what Quadra 620 said, MS doesnt make the same from different priced OSes. They make a lot more on a higher version of Windows than they do a lesser version. Those cheap PCs that Windows and the majority PC HW vendors dominate usually come with a lower-tier version of Windows. Usually to help bring the cost down, but also because they cant run certain things like Aero on some of that HW, at least they couldnt when Vista first appeared.

The PC vendors that try to compete at the high end can often more expensive than Apples comparable product. Usually when you have a cheap product with little profit margin you have to make up for it by trying to upsell to a more expensive product with a higher profit margin. Since Apple isnt playing that game Apple can be seen a better value when you get into the more expensive PC offerings.

Each model has its place in the market and I dont see how any of that will be changing anytime soon. I do see that eventually Apple will saturate their current segment and will have to offer more products at lower prices if they wish to still increase their year-overyear sales. They can also move into new markets but offering more products is usually the way to go.



MS was put in a tough spot. They didnt want to sell XP when they are pushing Vista, but it simply wouldnt run on Atoms and they couldnt let the very low end of the PC market be domianted by Linux-based OSes. The netbook vendors had a position to really squeeze MS to make XP very cheap to buy.

Do they care? Absolutely! Do it affect their bottomline at this point? Nope. But they have to look toward the future. Mac OS X is a gaining momentum. The iPod/iPhone halo effect, the move to Intel so one can install XP as a dual-boot, and internets move to OS-agnostic and browser-agnostic coding have all helped make the transition easier, but the Apple Stores have likely been the biggest contributing factor as people who had heard about Macs but never used one were able to finally get their hands on one. People can say they are expensive, but most of here likely remember when computers cost a lot more and did a lot less so I dont think $1000 or $1500 is unreasonanble for the machine you want. MS is afraid of what the future holds for their OS dominance, and I think Chrome OS will be a huge factor in the developing world where Apple simply cant touch with their premium product. That is not to say MS wont thrive or that they will lose the majority of the OS marketshare, but losing enough could reduce their valuation and unravel some other business end features that are the real money makers for them.

Yes but they are selling. 4.5 million Q1 2009. That's the fastest growing segment of the market. Some IDC figures.

Microsoft is just pissed because they have to virtually give away XP 'cos Vista don't work!



MS's ad strategy was trying to move more laptops... not netbooks.

MS/PC manufacturers (Dell, HP, etc.) find themselves in a very common business situation-diminishing profit margins where they all end up chasing the bottom. My father used to be in the milk business in the '70's and SealTest Food's (owned by Kraft) profit margin was called an "Eagle." In other words, .001%! All they were doing was wearing out the plants and trucks. They would actually make more money "not producing" milk!

Microsoft are EVIL>, don't you know??

http://www.ecis.eu/documents/Finalve...hoicepaper.pdf

http://rixstep.com/2/20090326,00.shtml

Balmer is such a condescending prick and MS could only gain by giving him the boot.
As a strategist and a public speaker, he's simply seen as an embarrassment to the company but with zillions in stocks, they can't figure out how to get rid of him.

sell that stock dude

Yes, that seems to be the situation, alright.

So are we seeing the end of the low-cost netbook? Or is this Google's shot?

I understand that.


Are you sure about that?

I don't live in the US so I cannot be certain but go take a look at the Best Buy web site. There are about 90 PC laptops for sale. Almost all of them come loaded with Vista Home Premium. Prices range from about $400 -$2000.

That's my point really. Even though PC hardware prices are dropping people are still paying (in general) for the same Windows version.

Even though, in a poor economy, people are choosing even cheaper PC models (and Microsoft seems to be actively encouraging that) they are still getting the same Windows version.

I don't know, but is it even possible to get an OS downgrade when you buy from a bricks and mortar store?

The only area where Microsoft is taking a hit is the fast growing Netbook market... and that is what this thread was all about.

Great time to sell! M$ has nowhere to go but down ...

Here in the States some of us think of Tom Waits as our poet laureate and he says:

[CENTER]Boney's high on China White
Shorty found a p-p-punk
Don't you know there ain't no Devil
There's just God when he's drunk[/CENTER]


So of course Microsoft aren't the Devil, cause there is no Devil! But M$ are indeed the embodiment of corporate evil in the tech sector, so cut Prince some slack ... he's got every right to hate them as much as he wants!

First, this pricing influences ALL PCs, not just netbooks.

Second, about a year ago, Netbooks were taking to Linux very easily. The trend has moved to XP for now, but the trend will reverse again now with Chrome OS and higher Windows 7 pricing.

How does that work when netbooks get a different licence fee than other types of computers? They just axe the netbook discount and the OS will be priced at the same rate as any other kind of computer.


Google hasn't shown that they can make desktop software consumers will use at a significant rate. They're really server-side people. They haven't taken much to their web browser, and let's not pretend that Chome OS is anything but vaporware right now.

Microsoft tax, anyone ?

I'm suprised nobody mentionned this...

So then, half the *alleged* reason for buying a netbook (cheap) will be gone.

I'm beginning to understand Apple's reasoning more and more in this area. They foresaw all of this long ago and have NOT caved in to offer cheap netbooks. They'll instead (if the tablet rumours are true) expand the mobile/miniaturized computing sector and sell on an enhanced portable experience.

Since Vista wouldn't run well on netbooks, MS agreed to provide the faster WinXP for certain netbooks, limited by screen size, quantity of RAM, processor speed, etc. Since Linux was being installed (for free) on such netbooks at the time, MS offered to provide XP to the OEMs for "nearly free" so that Linux wouldn't gain a stronghold in the netbook market. It worked.

Now, Windows 7 will (supposedly) run better on netbooks and MS no longer feels the need to provide an OS for "free." From what I've read, Win 7 is still much more sluggish than XP on a netbook so it'll be interesting to see how well it's received.

Will the OEMs start offering netbooks with Linux more frequently, or even Android or Chrome? Only time will tell. I think most people are afraid to experiment and would gladly pay an extra $50 to have their netbook come with Windows. And some even go for a MacBook to get Mac OS, even though Apple won't sell a mini notebook.

Keep in mind, this decision by MS will only increase the price by about $50. It's not like the price of netbooks is going to double overnight.

Are you stalking me? Just yesterday I was talking about that one; how Jack in the Box is the only restaurant I have heard of to kill people in multiple events spanning several years to still be in business.

There's hope yet for Microsoft!

They were your words, not mine. If you can't explain them and instead have to change the subject, I don't think it's me who needs to get real.

Not the end so much as netbooks becoming a "commodity" with commodity pricing..... cheap. Remember calculators, digital watches, AM radios, land line phones, snap shot cameras, digital memo recorders, etc., etc.

There will always be somebody willing to churn cheap netbooks out and there will be plenty of people to buy them. It's just that there is no "profit" anymore!

It's a big mistake a lot of poorly managed companies make....concentrating solely on Market Share as opposed to healthy margins. They say things like, "we're losing money on every item we make....no problem lower the price and we will make it up on 'volume,' duh!

Microsoft stock has gone nowhere since the stock crash of 2000. You should have sold that Microsoft stock and purchased Apple years ago, your money would have multiplied many times over by now.

Microsoft has done very little right in the last five years. You took a pretty big chance in investing in it if it was done in that period.

With that said, I just took advantage of the Cash for Clunkers program and got a new Mercury Mariner. I was very impressed with Microsoft's Sync. Hands free iPod and phone use is very nicely implemented in Ford vehicles. Apple should have took the initiative there. If Microsoft could start looking at innovating in new markets as opposed to try copying other's success it might do something.

The iPhone is a small computer. It actually competes in this market segment: Safari web browsing, e-mail, e-books, games, many apps, and it is a telephone and plays music as well. Apple is on the road to selling 25,000,000 this year, plus maybe 15,000,000 iTouches as well. This gives it a good market share of small form computers right out of the box.

If the iTablet appears at the very least it will be a big iTouch, and probably will include iWorks as well. Without question it will be more capable than any net book or cheap MS based OS entry. At a price point of $600 to $800 it will sell like hot cakes. Who knows where this will go?