Windows 7 may face 'Vista Capable'-like backlash

Microsoft has to make the Starter edition's limitations clear, says Gartner analyst

Microsoft Corp.'s plans for Windows 7 could be setting up the company for a consumer backlash similar to what it has faced with Vista, a research analyst said today.

The issue, said Gartner Inc. analyst Michael Silver, revolves around the Starter Edition of Windows 7. "A lot of people could be disappointed with Starter if they weren't aware of its limitations," said Silver. "There's a danger, I think, of people buying it and then getting shocked when the fourth app won't run."

Yesterday, Microsoft revealed that it will launch Windows 7 in six editions: Starter, Home Basic, Home Premium, Professional, Enterprise and Ultimate.

Windows 7 Starter will be offered worldwide -- a change from the same-named edition for XP and Vista, which was only sold in developing markets such as China and India -- and will be available only to computer makers, not sold directly to consumers. Yesterday, a Microsoft marketing executive pigeon-holed Starter as suitable for resellers "that build lower-cost, small notebook PCs."

The Windows 7 version of Starter will retain the restrictions of the Vista edition with the name, including a limit of three applications, or windows, active or open at the same time; no local network connectivity, although the operating system can connect to the Internet; and a limit on screen resolution.

Unless Microsoft spells out those limitations, it risks incurring the wrath of consumers, including those in places like the U.S., where Starter will be available for the first time, said Silver. "Microsoft will have to be clear on what Starter does and what it does not do," he said.

Consumers claim that Microsoft dropped the communications ball the last time it rolled out an operating system. In a lawsuit begun in 2007, and granted class-action status almost a year ago, people who bought machines labeled as "Vista Capable" in the months prior to Vista's release accused Microsoft of profiting from the marketing campaign, in large part because many of the computers were able to run only Vista Home Basic, the lowest-priced edition. Although Vista Home Basic doesn't include the same three-application restriction as Starter, it lacks such features as the Aero user interface.

Microsoft has denied the charges and said it made it plain that Home Basic was missing some of the features touted for Vista's other versions.

According to an economist who testified on behalf of the plaintiffs in the case, Microsoft earned more than $1.5 billion on the sales of PCs marked "Vista Capable."

However, Silver noted a difference between Microsoft's Vista Capable problem and the potential issue with Windows 7 Starter. "That's different than buying a netbook with Starter," he said. "As I understand it, [the] Vista Capable [case] was more about a hardware issue."

Even so, Microsoft could end up ticking off some customers when it launches Windows 7. "Starter could be a disappointment for a lot of folks," Silver said, again noting the application limit.

He even questioned Microsoft's motives, wondering if it really wanted Starter to succeed. "They've put a lot of work into Windows 7 on hardware-limited machines," he noted, referring to, among other things, comments made by several Microsoft managers and executives at a pair of developer conferences the company hosted last fall. "They'd much rather have people buy [Windows 7] Home Premium." According to Microsoft, Home Premium is intended to be its "primary" consumer edition of Windows 7.

The company has also aggressively promoted Windows 7 as able to run on hardware not able to handle Vista. Yesterday, in fact, Mike Ybarra, general manager for Windows, said the "premium" editions of Windows 7 were able to run on "small-notebook PCs [netbooks] with good experiences and good results"

Silver said that Microsoft's using Starter to cover all the netbook bases and block competitors, primarily Linux, from that market as much as possible. "Microsoft needs a Linux fighter," he said. "Starter gives them a better chance of selling on the lowest-priced netbooks."

Copyright © 2009 IDG Communications, Inc.

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