Microsoft Windows 7 for Netbook PC
Microsoft is hoist by its Windows petard
It’s something of a daft idea for Microsoft to attempt to square the Windows 7 circle by creating a “starter” version which will only run three applications on a netbook PC. Windows 7 is expected to launch this autumn. It’s almost certainly a better Vista than Vista.
Microsoft, actually, got off lightly when it offered Windows XP for netbooks. The OS was supposed to be redundant but there was just no way that Vista would perform well on these dinky little machines. And Microsoft doesn’t make anything like the profits it makes on Vista on notebooks – some estimate that it’s lucky if it gets $15 or so for XP on a netbook, rather than the $55 or so it gets on a fully fledged notebook.
Netbooks, in fact, are proving somewhat problematical for Intel as well as Microsoft. The netbook category is selling like hotcakes and there’s always the danger that sales of these things will cut into sales of its notebook processors, which make a far healthier profit margin than the Atom microprocessor.
Although, on the face of it, the “relationship” between Microsoft and Intel is still perfectly amicable, behind the purdah curtain there’s not much love lost between the two computer giants.
Intel is perfectly aware, and has been for years, that its share of the profit pie in a PC is diminishing, while Microsoft has pursued its well tested model of more or less forcing computer vendors to move to the latest OS it decides that people will have. Latest is not always the best as far as software is concerned.
That’s much truer for software than hardware. Intel has made mistakes in the past by introducing microprocessors that aren’t exactly the bee’s knees – the Pentium 4 was not particularly advanced compared to the Pentium III – and the Pentium III-M. But Moores’ Law continues to hold true for microprocessors. There is no equivalent of Moores’ Law for software. The more Microsoft adds “features” to its operating systems, the more it makes demands on the other components in a system.
Microsoft Gambles on Windows 7 ‘Starter’
Microsoft Corp. is taking an unusual approach with its new Windows 7 operating system: Customers buying many of the least-expensive laptops with the software are likely to be limited to running three applications at a time and miss out on other key features, or pay for an upgrade.
The strategy is one of the ways the software giant is responding to inexpensive portable computers called netbooks, a bright spot in the gloomy personal-computer business that is causing many companies to modify their business plans.
Netbooks — compact laptops that can cost less than $300 — pose problems for Microsoft because it can’t charge computer makers as much for software used on the low-end systems as for standard desktops and laptops. The financial effects were felt in the quarter ended in December, when it contributed to an 8% decline in Windows revenue. Investors will be searching Microsoft’s quarterly financial results this Thursday for further signs of netbooks’ impact.
The situation creates a dual challenge in launching Windows 7, which is expected to be released this fall. The company must try to protect Windows profit, a business that accounted for more than half of operating income in its last quarter, while trying to keep alternatives such as Google Inc.’s Android and other software based on the Linux operating system — often less expensive or free — from taking over the netbook market.
Microsoft managed to grab the lion’s share of netbook sales last year, but at a heavy cost. It was forced to offer Windows XP — a version of the operating system it had largely phased out — at bargain prices to counter Linux versions.
A Microsoft spokeswoman declined to discuss prices it offers PC makers, but people familiar with the matter say the company takes in less than $15 per netbook for Windows XP once marketing rebates are taken into account — far less than the estimated $50 to $60 it receives for PCs running Windows Vista, a newer operating system that runs on standard desktop and laptop PCs.
ARM’s Feeling Lucky; Netbook ‘Battle’ Just Beginning?
Thus far it seems that netbooks with Windows XP and Intel Atom processors have been the most successful, leaving little room for other players. There have been those who doubt ARM’s longevity in this particular market, so we decided to interview some of the folks at ARM. They told OSNews that the company is confident about its current and future mobile markets, and Linux, which will soon be on various ARM-powered netbooks, is one of the reasons why.
Price Issue
We talk with Bob Morris, ARM’s Director of Mobile Computing. He says that there’s less and less margin revenue for Intel and Microsoft as the price of netbooks goes further and further down; one can only make so much profit from a device that costs so much to build being sold for around $250-$390. Also, many people don’t want a mobile device to be a productivity replacement, and thus many of these devices don’t require what’s needed to run programs such as Microsoft Office and other productivity suites.
Different, Mobile-Friendly Chips
Morris says that the biggest difference between Intel and ARM chips is SOC: system on chip. On ARM-designed chips, many of the computer’s components are on the chip, including the CPU, GPU, MPEG4 controllers, USB controllers, various radios (WAN, WLAN, GPS, etcetera), and many more components, eliminating the need of larger motherboards. Jeff Chu, Segment Marketing Manager at ARM, mentions an entire computer being on a 3×3-inch board using SOC technology. Intel’s Atom is still essentially just the CPU meaning that the computer still needs various other components on the motherboard, not helping in smaller form factor or the power issues.