According to IDG News Service, Microsoft is offering ultra low cost PC manufacturers a deal on Windows XP Home that could take the price down to $16 for ULCPCs sold in "emerging markets" where it has to compete with free Linux.
Microsoft plans to charge PC makers US$26 for Windows XP Home Edition for ULPCs sold in emerging markets such as China and India, and $32 for those sold in developed markets, the documents show. PC makers who are eligible for its Market Development Agreement, however, can get a discount of as much as $10 off those prices, the documents say.
But the deal is only available for machines with screen sizes up to "10.2 inches and hard drives to 80Gbytes, and they cannot offer touch-screen PCs," says the story. "The goal apparently is to limit the hardware capabilities of ULPCs so that they don't eat into the market for mainstream PCs running Windows Vista, something both Microsoft and the PC vendors would want to avoid."
The story doesn't mention Microsoft's third world programme or the Starter edition of Windows XP, which are thought to be available for around $3, with even more restrictions.
The US Justice Department prevents Microsoft from doing deals for Windows, but it offers volume and other discounts plus a range of sticker, advertising support and marketing programmes to make it available at relatively low cost. This is just another example. They're all optional, of course. But if you're a ULCPC manufacturer, you don't want to be paying $44 or even $32 per copy for Windows if the guy down the road is paying $16 or less.....
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