Steve Ballmer has all but admitted that Windows 7 Starter Edition, to be sold on netbooks, is little more than a way to get people to upgrade to higher-priced versions of Windows 7. Is this the latest version of the time-honored strategy of bait and switch?
Computerworld's Gregg Keizer reports that Ballmer recently finally confirmed that Windows 7 Starter Edition will be available only on the most underpowered of netbooks.
Keizer reports that at Microsoft's annual financial analyst day on July 30, he said:
"Our license tells you what a netbook is Our license says it's got to have a super-small screen, which means it probably has a super-small keyboard, and it has to have a certain processor and blah, blah, blah, blah, blah."
The "blah, blah, blah, blah, blah," aside, the site TechARP.com had previously reported that Windows 7 Starter Edition will only be allowed to be sold on netbooks with a screen of 10.2 inches or smaller, 1 GB or less of memory, a hard disk of only up to 250GB or a solid-state drive not larger than 64GB, and a single core processor running at a maximum of 2GHz.
At the moment, those are fairly standard specs for a netbook, although some netbooks already sport larger screens, such as ones from Lenovo, Samsung, and Asus. And Intel has announced its "Calpella" platform that could be used to build netbooks --- but the platform is dual core.
Given that hardware always gets more powerful, over time, there will most likely be fewer netbooks that qualify for Windows 7 Starter Edition. Only the lowest-end netbooks will have Windows 7 Starter Edition on them. Microsoft will get much less per Windows license for Starter Edition that it will for more powerful versions of Windows 7, so it has plenty of incentive to get people to move to the higher-end versions of Windows.
So where does the bait and switch come in? System vendors, hand in hand with Microsoft, will most likely advertise low-end devices at low price points, which will include Windows 7 Starter Edition. But once vendors and Microsoft get people's attention, they'll shift them towards higher-end netbooks with more powerful processors, larger screens, and more usable keyboards --- and the more expensive version of Windows 7.
Ballmer all but admitted that strategy. At the financial analyst day, Computerworld reports, Ballmer said:
"It's not just what are our prices -- that's partly in here -- but it's also a function of how well do we do getting, in any segment, people to buy the more expensive offering."
Microsoft has to do something to get Windows to generate more cash. For the first time ever, its revenue from Windows has dropped year over year. Getting netbook owners to buy higher-priced version of Windows 7 is one way to help.