Separating fact from speculation of Windows 7 and Netbooks

Is Microsoft going to take a revenue hit when it releases Windows 7 because of the changing mix of PCs in the market? That's the expectation of many company watchers, though I have to admit I'm not quite so sure. Here's why.Even though Microsoft is trying to stir up excitement for Windows 7’s prospects on […]

Is Microsoft going to take a revenue hit when it releases Windows 7 because of the changing mix of PCs in the market? That's the expectation of many company watchers, though I have to admit I'm not quite so sure. Here's why.

Even though Microsoft is trying to stir up excitement for Windows 7’s prospects on new (and most likely more expensive) multi-touch-enabled PCs, there is more interest among users and industry watchers around the next release of Windows running on netbooks. Microsoft officials demonstrated a full-fledged version (we don’t know which pre-beta build number) of Windows 7 running onan Asus Eee with 1 GB of RAM. Netbooks — which I’ll use here to refer to low-cost, low-end PCs capable of running email and a Web browser, but little else — are quickly becoming an increasingly large part of the overall PC market.

Here’s where the speculation comes in: “Many are assuming that because netbooks cost a few hundred dollars, Microsoft will charge netbook makers less per copy of Windows preloaded on these machines than they will charge OEMs for Windows 7 running on full-power laptops. They are basing this assumption on the (seemingly logical) conclusion that PC makers won’t be willing to pay one-fourth or more of the price per machine for the operating system.”

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