Microsoft to give XP price cuts for budget laptops

Microsoft plans to offer hardware vendors significant price cuts on Windows XP licenses for low-cost computing products, but the deal will only be available for computers with low hardware specs. This tactic is part of Microsoft’s strategy to stifle adoption of Linux by computer manufacturers that are targeting the budget market, where low cost and high flexibility give the open source operating system an edge.

The popularity of the game-changing Asus Eee PC, which ships with a heavily-modified version of the Xandros Linux distribution, spawned a whole new class of inexpensive computers. Other vendors have entered the market with their own competing products, many of which also use the open source operating system. Windows is a poor fit for such computers, which are designed and priced like budget appliances. Vista requires too much hardware overhead, while Windows XP licenses add extra expense to the budget hardware that can be avoided by using Linux. So as products like the Eee bring Linux into homes and schools, Microsoft has struggled to squeeze into the growing budget hardware niche. (link)

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