Does Microsoft Want You to Hate Netbooks?
With complaints about Windows 7 Starter piling up, is Microsoft trying to make netbooks undesirable? Not quite, say industry analysts, but there is a subtle strategy at play to get users to buy up to higher-priced PCs.
CIO —
A survey published this week by consumer shopping site Retrevo puts Windows 7 Starter on trial for disappointing netbook users who were expecting more features and fewer restrictions.
With Windows 7 now available to all, Microsoft is between a rock and hard place as it tries to replace the aging Windows XP without overemphasizing Windows 7 on netbooks.
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Microsoft's sweet spot is Windows 7 on ultrathin and regulation-size laptops, but those higher-priced PCs are in danger of being cannibalized by netbook sales, say industry analysts.
Microsoft Stuck with Netbooks
Netbooks appeared suddenly about a year and a half ago with most machines running a Linux-based OS. Microsoft curbed that threat by installing Windows XP on netbooks. Now, says Roger Kay, veteran analyst and president of research firm Endpoint Technologies, Microsoft and its hardware partners are reluctant participants in a netbook industry that returns little profit for all parties.
And the netbook market shows no signs of slowing. A report published last month by market researcher DisplaySearch showed that in Q2 of 2009 netbook revenue increased 37 percent compared to the prior quarter, and increased 264 percent compared to the same time last year, all of which drags down traditional PC prices.
"If Microsoft could kill the netbook market it would, but they're stuck with it," says Kay.
[ For complete coverage on Microsoft's new Windows 7 operating system -- including hands-on reviews, video tutorials and advice on enterprise rollouts -- see CIO.com's Windows 7 Bible. ]
He adds that Microsoft and its OEM partners are using Windows 7 Starter to de-feature the OS on netbooks and make it difficult for users to get all they want.
"They want users to think 'I need more than this.' It's a way to upsell to higher-priced laptops," says Kay.
Originally Windows 7 Starter could only run three applications at once, but Microsoft eliminated that restriction in late May. Yet the OS still lacks features such as the ability to use the Aero graphical interface, play DVDs and use Windows Media Center.
Most netbooks are shipping with Windows 7 Starter pre-installed. The Retrevo survey points out that 23 out of 28 netbooks now available on Amazon.com are installed with Windows 7 Starter.
Netbook users who are unsatisfied with Windows 7 Starter can spend $80 to upgrade their machine to Windows 7 Home Premium through the Anytime Upgrade program, which is accessible on Microsoft's Web site.
