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Microsoft Gambles on Windows 7 'Starter'

Apr 20, 2009, 17:02 (15 Talkback[s])
(Other stories by Nick Wingfield, Don Clark)

"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.

"Netbooks are expected to run better on Windows 7 than Vista, which required more powerful hardware than netbooks offered. To encourage use of the new software, the company plans to offer a version called Starter that will be inexpensive but comes with significant limits. Besides only running three application programs at a time, Starter will also lack some spiffy graphical interface features of other versions of Windows 7."

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