Win7: Why MS Wants You to Buy Laptop, not Netbook

A mix of dwindling profits and fussy consumers is causing Microsoft Corp. to take extra precautions when planning the release of their forthcoming Windows 7 operating system.

The current economic meltdown presents a dual challenge for Microsoft: on one hand, the company knows that consumers are likely to flock towards the less expensive netbook computer models that offer only the most essential features. When the consumer opens their new netbook computer for the first time, Microsoft wants to ensure that one of their operating systems is running on it.

On the other hand, Microsoft wants to maximize Windows profits, meaning that the company will entice consumers to purchase more expensive PC and laptop models.

Netbook Version of Windows 7: A Compromise

Microsoft is now about to gamble with an idea that will either satiate or frustrate new netbook owners.

Those who purchase one of the least-expensive computer models with Windows 7 software will be limited to running three applications at a time and miss out on a few other features.

The drive towards netbooks has been a real thorn in the side of Microsoft for some time, since the company cannot charge computer makers as much for software used on these low-end systems as they already do for standard desktops and laptops. (Source: wsj.com)

2008 Netbook OS Leader: But at What Cost?

Microsoft did manage to top netbook sales in 2008, but did so offering Windows XP (an older operating system in the midst of its phasing out process) at bargain prices to ward off rivals.

Still, after rebates have been taken into account, Microsoft only makes about $15 per netbook with Windows XP. Compare that to the estimated $50 or $60 that the company makes with PCs and laptops that run the newer Windows Vista and you could see why Microsoft is pushing people towards higher-end computer models. (Source: wsj.com)

To promote Windows 7, Microsoft plans to offer a basic version called 'Starter' that will cost less than the full version, but will come with limitations. In addition to running no more than three applications at a time, Starter will also lack the refined graphical interface features that can be found in the full version of Windows 7.

If netbook owners wish to experience the full extent of the new Windows 7 OS, there is also an upgrade available -- but for a small fee, of course.