Microsoft targets low-cost PC market

Microsoft, HP and Dell seeing the opportunity in low-cost, Linux-based devices that do everything the average user needs

Microsoft sees the ultra-low cost PC market as a significant opportunity and plans to pursue it with vigor, according to Kevin Turner, Microsoft's chief operating officer.

The market for ultra-low cost PCs (ULCPC) also is drawing heavy interest from vendors using the Linux operating system that are manufacturing computers and devices based on the open source operating system.

"We see this as a serious space and we are gong to fully participate in ULCPC," Turner says. "We are spending a fair amount of time on it."

Turner says it isn't all about emerging markets, however, which is where the focus is now. "This may start in emerging markets, but it is not only an emerging market play," he says, adding that ULCPCs will likely become the third or fourth PC for some users.

He says Microsoft is evaluating what Linux on the desktop can do versus what XP can do. "We know that we have to innovate, but certainly we believe there is a big difference here: the elegance, the application compatibility, the familiarity," he says.

Turner says Microsoft is still evaluating which type of hardware will eventually be the most popular.

While those preferences will evolve over time, Microsoft is making sure it has an operating system option in the market. Two weeks ago, the company said it would make Windows XP Home available to OEMs for ULCPCs until 2010.

Microsoft was forced to default to XP given the fact that Vista is too resource intensive for the ULCPC platform.

Last week, Turner traveled to India to finalize a deal with India's HCL to have Windows XP Home as the foundation for "the world's cheapest Windows laptop."

The market for these low-cost machines is being driven by inexpensive bandwidth; the growth of services and cloud computing; and cloud-based processing, storage, management and associated IT services.

Experts have said that the big question is how big the market will become for low-cost computing devices. ULCPCs are drawing interest from governments, schools, emerging markets and developing countries. Microsoft is fighting against emerging interests in using Linux over Windows to keep development costs down.

The market has seen the recent introduction by Everex of its US$400 Linux-based CloudBook.

Some manufacturers are hedging their bets. For example, AsusTek sells four versions of its "barebones" Eee PC with a Linux-based operating system, but lists in the computer's spec sheet that they all are Windows XP compatible.

Bruce Guptill managing director of research firm Saugatuck Technology says manufacturers, including major ones such as HP and Dell, are seeing the opportunity in low-cost, Linux-based devices that do everything the average user needs for a price that is between US$200 and $500. It's a market Microsoft does not dominate.

In fact, Guptill says the market trend caught Microsoft unaware during its five-year development of Vista.

"The long-standing user computing model of ever-increasing power and speed at the desktop [or laptop] may be fading in favor of lower-cost machines with "good enough" capabilities," he says.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Fontana

Network World
Show Comments

Cool Tech

Bang and Olufsen Beosound Stage - Dolby Atmos Soundbar

Learn more >

Toys for Boys

ASUS ROG, ACRONYM partner for Special Edition Zephyrus G14

Learn more >

Sony WF-1000XM3 Wireless Noise Cancelling Headphones

Learn more >

Nakamichi Delta 100 3-Way Hi Fi Speaker System

Learn more >

Family Friendly

Mario Kart Live: Home Circuit for Nintendo Switch

Learn more >

Philips Sonicare Diamond Clean 9000 Toothbrush

Learn more >

Stocking Stuffer

Teac 7 inch Swivel Screen Portable DVD Player

Learn more >

SunnyBunny Snowflakes 20 LED Solar Powered Fairy String

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?