Submitted by Plummeting prices of PCs are great news for consumers, but are a disaster for hardware makers. Microsoft isn’t cutting them any slack with Windows pricing. Will PC price drops catch up with Microsoft in other ways?
Plummeting prices of PCs are great news for consumers, but are a disaster for hardware makers. Microsoft isn’t cutting them any slack with Windows pricing. Will PC price drops catch up with Microsoft in other ways?
“Another point of contention: Microsoft is charging PC makers $50 for entry-level Windows 7 Starter on netbooks, compared to the $15 the company had been charging for Windows XP on netbooks.”
Meanwhile, small builders and retail OS buyers are really taking it in the shorts. Ninety dollars for the most basic XP and $105 for Windows 7. There’s no reason in heck why the most mass-produced piece of software on the entire planet should cost more than a processor or motherboard.
What consumers need is some real competition in the OS market to keep pricing under control.
I’m all for more competition but I really don’t think this is something that people should grind their teeth over. The fact that they have a starter edition shows that they can’t sell their OS at any price.
But more importantly both Dell and HP could have invested in their own OS years ago. Boo freaking hoo. What a joke that we are supposed to feel sorry for billion dollar companies.
But the starter edition isn’t sold to retail customers or to small builders; it’s only available to the largest richest corporate customers. That’s my point.
They only want it to be used on netbooks. It’s not supposed to be for cheap desktops.
But I agree that it is lame that Dell can get bulk discounts while small builders have to pay a fixed price. There is probably room for a law there to limit how much a software company can discount a bulk sale, especially since with software the manufacturing cost is fixed. It isn’t like with food or textiles where shipping in bulk to a major supplier can really cut down costs.
Feel like starting up a new company? These days with the quality of Linux distros, it would be relatively easy to take one of those, and start selling PCs with them pre-installed – if you make the right deal with consumers.
My mother-in-law has been running Ubuntu for months, as an example (she’s in her 50s, and has no technical experience at all). She loves it.
This would be no problem, if you could buy hardware for the same price as Dell can.
But as a small shop, you will be hard pressed to get a naked machine without OS (or with Linux) out the front door for the same price Dell can ship their machine including Windows.
As it is now, small shops can only survive by providing excellent service for computers they build themselves.
What I dislike about netbook makers is their dumbing down of Linux-preloaded shippings compared to the Windows-preloaded ones. You get the Linux machine for €15,- less than the windows machine, but it has only half the disk space and probably less RAM and a slower clocked processor. I don’t really understand the reason for this.
Ahhh … Microsoft. Who cares for them anyway? who would ever want to use Windows or MacOS, when there are so many alternatives? You just don’t know it’s there unless you stumble upon Win/MacOS problems …
Plus – you can get cheap PC *without* OS [ok, it has DOS or Linux, but you can reinstall to whatever you like]. They won’t make me use their crap again.
Who the hell still sells PCs with DOS preinstalled as the primary OS?
Wasn’t there a time that some OEMs, due to business contracts with Microsoft, weren’t allowed to sell computers with no operating system? So to get around it, they included one of the freeware DOS discs with each no-OS computer sale?
That’s what I recall reading anyway. Years ago…
Yes, a couple of the “big name” computer makers offered FreeDOS as an option. It was mainly for online orders.
Dell still offers FreeDOS as an option on some of their business PCs. You have to specifically go looking for it, and what the point is I don’t know as these machines cost more tha most of their product line, but they’re there. Kind of funny really, DOS is hardly ever used in business except for some very old point-of-sale or other specialized machines. I can’t think of any reason why anyone would pay more for a DOS machine than for an Ubuntu or Windows box today, but they’re offered if you want them.
From previous stories on OSNews and other sites, one of the reason Microsoft’s OEM pricing for XP on NetBooks was decreased to a low (of $15) was partially due to some acceptance of Linux on such systems and partially due to the tarnished general acceptance of Vista. With that low pricing, the non-XP based NetBooks almost disappeared overnight from the market.
The story may repeat it-self in the coming months with the stated OEM pricing of $50 for 7 on NetBooks.
What is still missing to initiate the shift earlier than that is a Linux distribution well recognized outside of the Linux inner cicle. Given that Dell is toying with Chrome OS, their next NetBook offering may actually be based on something quite different and more recognizable than what has been the traditional Linux distribution. The coming year may become quite exciting in terms of defining the ideal NetBook in terms of hardware and software.
It’ll take years to break the mental hold the current “style” of desktop computing has on regular buyers.
Whilst ChromeOS is “interesting”, it’s got no chance of competing with Windows for quite some time yet.
Edited 2009-12-03 09:59 UTC
5 short years ago nobody heard of Ubuntu. Everybody knows who Google is. At the current rate of netbooks price drop, they could give them away for $100.00 U.S. in 2-3 years(and they will), making it very tough for M.S. to compete. I wonder what M.S stock price will be in 5 years? I’m an “Ubuntu fan-boy”, love linux , but wonder if this will finally drop M.S. back down to earth. Even I.B.M., as big as they were before Windows, thought it would never happen. Ford, G.M., Chrysler ,and Americans in general still believe that they will never fall. Ever. To quote that crusty C.I.A. agent in Charlie Wilson’s War “We shall see” No I don’t hate the U.S. , but we Canadian’s are just about sick to death of the next door neighbors acting like it’s never going to happen, and they are the best at everything, and we have nuke’s, and nobody can stop us if we want it. I welcome my Chinese (or whomever) overlords, the same way I welcome my Google overlords. Which is to say not much at all. But to us Canadians, in general, as long as we win gold at the Olympics , we are better people, which goes to show we are arrogant as well.
Google will never beat Microsoft, but they will scare the crap out of Microsoft’s accounting department; and shareholders .
I can’t wait for 128 bit, and more parallel programming, and HTML5, and cheap ssd drives, and quantum processing, and…..
I think it’s time you stepped away from the coffee percolator…..
It’s too late in the morning to contemplate that sort of foolishness…… and we will not stop until the gold is ours!!!
My point is simply this: Don’t trust a Canadian jacked on caffeine. I mean it.
Sorry, I was reading this article: http://itmanagement.earthweb.com/osrc/article.php/3850561/Open-Sour…
Edited 2009-12-03 16:47 UTC
The only reason that Ubuntu has a bit of name recognition is because Ubuntu comes pre-installed on some laptops that are actually in stores where people can see it. Some folks even bought Ubuntu-running computers.
Was Ubuntu popularity a sign of things to come? Or a mere blip of short-lived Linux success?
Looking back at Linux history, it seems the peak of fame and name recognition happened when Red Hat was actively marketing their distro to the general population. But where are they now? Yeah, they’re still in business, even successfully. But how many years since they’ve pushed an actual consumer product?
In order for Google to take advantage of their name recognition, they should call their operating system GoogleOS or similar.
The only reason that Ubuntu has a bit of name recognition is because Ubuntu comes pre-installed on some laptops that are actually in stores where people can see it. Some folks even bought Ubuntu-running computers.
That and Mark Shuttleworth , the founder, was in space. And Dell sells them. “Gotta get a Dell dude”. Wonder what the Linux commercial would sound like? “Gotta get a Dell with Linux if you can find it on our website, Dude”
If someone is looking for a computer to run an open source operating system then having components supported by the OS can be the deciding factor whether a person buys it or not. I am not just talking about Linux distros, but the *BSDs also.
Sorry, but I have no sympathy for the PC makers. None of them provide a “no OS”/FreeDOS/Linux option for MOST, let alone all, of their computer offerings. Sure they have a few special configurations that cost more than the equivalent Windows systems but that defeats the point. If they did offer this as a standard option on systems and users could select to save $50 by ditching Windows then maybe they’d have more bargaining power in setting the price. Hell, maybe I’d even look at them for some of my non-corporate machines again.
My guess, most people interested in FreeDOS/No-OS/Linux computers are not considered potential customers by the large OEMs since those people are almost certainly going to build their own systems. First, those people are technically-minded and capable. Second, they take pride in doing things themselves. Third, they’re budget-oriented. Fourth, they (including myself) are not going to tolerate proprietary hardware that can’t be upgraded/replaced.
Some OEMs have tried it in the past. If it were profitable and customers were satisfied, the OEMs would still be doing it and expanding those programs.
You are right, but as your parent poster trev already said, the main advantage of the move would be to get more bargaining power over Microsoft.
Small example:
1) Currently company A makes $20 revenue off a cheap 500$ Windows machine, selling 200000 of them a year.
2) Implementing a policy to only use hardware which is supported out of the box by Linux, and offering every PC with Linux installed for $50 less than with Windows installed might lead to a revenue of only $10 per Linux machine sold.
3) Given enough Linux sells (10% should already do the trick), would give company A enough bargaining power to get a few bucks discount (say, $5).
Now add up the math: 90% of machines still sold with windows, making $25 per machine + 10% of machines making $10 per machine. Compare that to 100% of of machines making $20 per machine.
Comparing 10 machines:
9 * 25 + 10 = 235
10 * 20 = 200
What I can see from above numbers is that the Linux offerings could even get negative and it still is a good net win.
Once Linux offerings get market shares higher than 20%, the economy of scale kicks in, and they will be manufacturable for the same cost as the windows offering minus license fees.
…If consumer knew better that 60% of the cost of their computer is software, they may be inclined to get the free one (Linux, *BSD). Especially if it does everything they need.
I don’t mind paying for software. What I mind is paying 5X more than someone else for the exact same software, and I mind paying more for software than for hardware.
BSD and Linux instead of Windows? Not likely. What the market needs is ~real~ competition.
But where is that competition supposed to come from, if not from an already established OS?
Creating an OS from scratch is no small task. And that’s just the actual OS. You also need lots of stuff in the userspace (applications and a graphical desktop) as well as lots and lots of hardware drivers.
I’m afraid that right now the only viable alternative to Microsoft is still Linux. I mean viable as in something a corporation can pick up and start developing a successful desktop OS on without spending impossible amounts of money on R&D. Canonical proved this point with Ubuntu. Google is doing Chrome OS. Many others are invading the smarthphone market with Linux-based products.
Building a Windows alternative with Linux is doable. It’s been proven. I see absolutely nothing else out there, apart from Mac OS X.
Sooner or later the PC OEM’s will have to wake up and acknowledge this. It’s simple, really: they can stay at Microsoft’s whim, or they can use something else. Apple has just showed that they don’t want to license Mac OS X to anybody else.
So it’s back to Linux and *BSD and of these two, Linux is the one with the most sucess stories.
Both Canonical and Google would love to have a real go at the OEM market. Add the recent rise of ARM and the public’s newfound love for ultra-cheap portable machines that just work and do just enough, and we may have critical mass.
Edited 2009-12-03 21:10 UTC
Simple but for the fact that capitalism has an attention span of about a fiscal quarter. And a long-term memory of about a fiscal year.
Comsumers have not such a sweeping perspective. They want the best deal on what they think they want *right now*. No “long-term” strategy at all for them.
Frustrating, isn’t it?
I don’t see your point. Yes, consumers want things “now” and companies have to plan long-term if they want to survive. So? One does not preclude the other. I hope you’re not saying that companies shouldn’t do long-term planning.
I’m saying that, in general, they don’t plan far enough ahead to get out from under a company like Microsoft. You say the choice is simple. So… why haven’t Dell, HP, et. al. taken the logical out already?
You can probably safely ignore my comment about individual consumers thinking short term, believing that they are doing their part to ensure that the Free Market governs itself, while ignoring the fact that consumers have a responsibility to look at the long term. It may not be directly related to your post. It’s just that I feel remiss if I don’t at least mention where the ultimate responsibility lies.
I think it’s more likely that most people would install illegal copies of Windows long before they try Linux or FreeBSD.