Microsoft To Discount Windows XP for ULPCs
Linked by Thom Holwerda on Mon 12th May 2008 17:40 UTC
Windows Last week, we reported on a peculiar price difference in Australia between the Linux and Windows versions of the Asus Eee PC 900, the new model in the Eee line. The Windows model was 50 USD cheaper than the Linux model - the Linux model did have a bigger hard drive, but interestingly, the version with the smaller hard drive was not available as a Linux machine. This gave rise to speculation that Microsoft had been putting pressure on Asus to favour Windows XP over Linux. It appears Microsoft's assault in this segment of the market goes deeper than just Asus and the Eee alone.
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RE[4]: "Assault?"
by gonzo on Tue 13th May 2008 03:01 UTC in reply to "RE[3]: "Assault?""
gonzo
Member since:
2005-11-10

Well, where exactly do you see price discrimination in this case?

Price discrimination also might be used as a predatory pricing tactic -- setting prices below cost to certain customers -- to harm competition at the supplier's level.

1. Where do you see that MS is setting prices below cost,
2. and that it is for certain customers only?
3. How do you know Xandros Linux is not priced below cost to harm competition too?

Edited 2008-05-13 03:05 UTC

Reply Parent Score: 3

RE[5]: "Assault?"
by Splinter on Tue 13th May 2008 03:07 in reply to "RE[4]: "Assault?""
Splinter Member since:
2005-07-13

Well, where exactly do you see price discrimination in this case?

Price discrimination also might be used as a predatory pricing tactic -- setting prices below cost to certain customers -- to harm competition at the supplier's level.

1. Where do you see that MS is setting prices below cost,
2. And that it is for certain customers only?


1. We don't know the internal costs of XP however they sell the current OEM for over $100 AUD. (nearer 150 I think) so if $32USD is not less then cost then there profit margins are HUGE. (Note you can only support profit margins like that if you have a monopoly)
2. The conditions of the license to limit for certain customers, customers buying ULPC's with less than 1GB Ram etc.

So as far as I can tell it matches on both counts.

Reply Parent Score: 2

RE[6]: "Assault?"
by Thom_Holwerda on Tue 13th May 2008 09:48 in reply to "RE[5]: "Assault?""
Thom_Holwerda Member since:
2005-06-29

1. We don't know the internal costs of XP however they sell the current OEM for over $100 AUD. (nearer 150 I think) so if $32USD is not less then cost then there profit margins are HUGE. (Note you can only support profit margins like that if you have a monopoly)


I think XP's production costs are the cost of pressing CDs, more or less, at this point. The investment in XP and 2000 will have already earned itself back about a million times, so I don't think USD 32 is below production costs at all.

Reply Parent Score: 2

RE[6]: "Assault?"
by gonzo on Wed 14th May 2008 01:46 in reply to "RE[5]: "Assault?""
gonzo Member since:
2005-11-10

2. The conditions of the license to limit for certain customers, customers buying ULPC's with less than 1GB Ram etc.

But it is the same for ALL those customers that are deploying XP on those ULPCs (with less than 1GB). They ALL get the SAME deal, if the device is in that category.

For example, both Dell and Asus would pay the same for XP on that kind of device. No preferred treatment.

Reply Parent Score: 2