Microsoft as OEM? The Redmond giant has announced its plans to sell low-cost Windows PCs in parts of India as part of its "Unlimited Potential" program, with the first model using AMD CPUs and being priced just above $500.
Dubbed the IQ PC, the machines will cost RS21,000 (about $525), are manufactured in partnership with Zenith, and will sport AMD Athlon CPUs.
Aimed primarily at students, the desktop PCs will initially be made available in a limited number of retail outlets in Pune and Bangalore. After a three-month trial, the program will be expanded if sales are strong enough to warrant it.
"We don't see any gain in the short term. Our perspective is long term," Microsoft India chairman Ravi Venkatesan said in a statement. "The IQ PC offerings are supported by a host of partners, both hardware and software, who have extensive experiences, understanding and are leaders in their area of operations."
The IQ PC will be bundled with Microsoft software including Encarta, Microsoft Works, "Student 2007," and what Microsoft describes as "specialized education solutions" from partners like Brilliant Tutorials, Junior Achievement, Gurujiworld, and Tutorvista.
In some ways, the move to sell hardware is a natural extension of Microsoft's low-cost Windows initiative. Launched in 2004, Windows XP Starter Edition is a limited version of Windows XP that is limited to running three apps at a time and with an 800x600 monitor resolution. In October 2006, Microsoft announced that it shipped the one millionth copy of XP Starter Edition.
Although Microsoft has characterized XP SE as an attempt to increase computer literacy, it's also Microsoft's way to gain some revenue that would otherwise be lost to software piracy. OEMs are rumored to pay between $15 and $35 per copy of XP SE, which adds far less to the cost of a budget-priced PC than a full-featured version of Windows.
It may also be a response to projects like Intel's Classmate PC and the OLPC XO. Although the Classmate PC is capable of running Windows, the OLPC XO will not support the OS, remaining Linux-only (for now). Perhaps more troubling to Microsoft have been recent "OSS-only" initiatives such as one in the Indian state of Kerala.
Microsoft may also want in on one of the largest markets in the world. India's population has passed the one billion mark, and only 1.4 percent of the population owned a PC as of April 2005, making it a potentially very lucrative market for PC manufacturers in the years ahead.
Will Microsoft start selling PCs in North America? We seriously doubt it, but if Microsoft sees success in India, similar partnerships may be forged in other emerging markets.
Source:? Ars Technica
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