foobar on computers, software and the rest of the world


Microsoft's deep-discount strategies for ultra low-cost PCs

, posted: 11-May-2008 07:53

On the heels of the recent discussion about the pricing of the Asus EEE PC with Windows, news reaches us today about a leaked document, which details Microsoft's pricing strategy for ULPC manufacturers. The article is here. Microsoft's normal license fees are so high that they seriously impact the overall pricing of any such system. Thus, GNU/Linux managed to make inroads in that market. Microsoft can't allow that and so they offer Windows XP at steep discounts to those ULPC manufacturers. Sometimes not more than US$16 per copy.

If pricing for software is that 'pliable', I guess it shows very clearly that pricing of software is totally arbitrary, and has no relation to its actual value. The pricing of open source software clearly is much more honest.


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Comment by Jono, on 11-May-2008 12:26

Well, I'd argue that in general the price of software isn't arbitrary - it needs to cover the research, development, marketing [etc] costs.

In this case it would appear to me that $16 does not cover these costs. I'm thinking below cost pricing by a convicted monopoly. When Carter Holt Harvey did a similar thing with Pink Batts the Commerce Commission was all over them. http://www.comcom.govt.nz/MediaCentre/MediaReleases/ArchivedReleases/1999/highcourtfindscarte.aspx


Author's note by foobar, on 11-May-2008 16:36

@Jono: Actually, I would argue that the cost of development for Windows XP has been recovered by Microsoft a long time ago.


Comment by capricornus, on 12-May-2008 06:18

These are clearly the rules of essential capitalism: create a need. Then provide a paid solution.

But even more essential is to create users that only know WinXP, and keep the above need alive.

And this is sustained by a marketing that makes the consumer believe that no pc can work without WinXP. It completes a circular thinking that microsoft wants to keep very active.

I know better. But 99 other consumers don't. They pay, even only $ 16. They will believe they are better of than the linux-fellows.

They will believe. Believe. Thats it.


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New Zealand


  • Who I am: Software developer and consultant.
  • What I do: System level programming, Linux/Unix. C, C++, Java, Python, and a long time ago even Assembler.
  • What I like: I'm a big fan of free and open source software. I'm Windows-free, running Ubuntu on my laptop. To a somewhat lesser degree, I also follow the SaaS industry.
  • Where I have been: Here and there, all over the place.




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