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iTnews: Microsoft Losing on the Desktop

Oct 10, 2002, 16:00 (55 Talkback[s])
(Other stories by Paul Thurrott)

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"A growing trend of ultra-cheap computers is threatening to damage Microsoft's hold on the desktop software market by attacking the core market to which Windows and Microsoft Office actually sell: PC bundles. Microsoft sells the majority of its Windows and Office licenses preinstalled with new PCs, but as PC prices fall--to as low as US$200 a box this year--the cost of Windows and Office licenses, as a percentage of the total system cost--is rising dramatically. That's causing PC makers to look at alternatives in ever increasing numbers, to both of Microsoft's core products.

"Wal-Mart's cheap PCs are leading the charge. Available in versions with Windows, with various Linux distributions, or with no OS installed at all, the Wal-Mart PCs are rebranded Microtel boxes that generally sell in the US$200-400 range sans monitor. The machines are filled with exactly the kind of cheap componentry you might expect, including Via Technologies chips, rather than more powerful versions from Intel or AMD, and low-speed, low-capacity hard drives and CD-ROM drives. But for just a couple of hundred bucks, even the thriftiest of customers can now outfit themselves with a fully functional computer. And some of those PCs are shipping without any Microsoft products on board..."

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