On Aug 25, 9:03 am, bbgruff <bbgr...@xxxxxxxxxxx> wrote:
> Linonut wrote:
> However, IIRC the price of XP Home (to the manufacturer) on these machines is
> in the order of $30. Those prices are typically for those purchasing huge quantities, usually around 10 million. The OEM base price is about $60, and the discounts for less than 120% of anticipated sales, might only bring it down $20. On the other hand, Microsoft may be so threatened by Linux in this market that they are willing to DUMP XP on that market at lower prices.
The Linux distributors have been offering very good terms. The
version used on ASUS was about $1 per copy and was FREE if you used an
ASUS motherboard in your desktop or laptop machine.
At one time, Red Hat was offering OEMs a price of $2 per machine. I
don't know if they are still offering those terms. Novell was also
offering a very low price to OEMs of desktop and laptop machines.
More importantly, Novell and Red Hat were offering support terms that
freed the OEMs of the support effort and costs.
At this point, Linux is able to offer OEMs higher profit and the
possibility of stimulating increased sales. The subnotebook market
has far exceeded anybody's expectations, and now all of the other OEMs
are looking at not only the SubNotebook market, but also the ability
of a fully functional pre-installed version of Linux to accelerate and
generate Laptop sales.
> Then bear in mind the premium that pre-installation
> of "crapware" (pre-loaded 30-day trials, etc.) commands, and I can appreciate
> that pre-loaded Linux isn't going to be much cheaper, if at all, on
> the "headline price".
The problem is that there isn't a lot of room for "crapware" as you
call it, on a subnotebook.
The beauty of the subnotebook is that it's a fully functional (Linux)
system that's ready to do the things you most want to do.
> By contrast, I look from time to time at Dell prices, and when I actually
> compare like-for-like I find that in the U.K. they seem to charge up to $100
> *more* for Linux rather than Windows! Presumably I'll be told that everybody
> wins if one buys a Windows machine and over-writes it with Linux, in that:-
Dell, HP, and Lenovo have found that most of those who order Linux
machines tend to shift their money into higher resolution LCD
displays, more RAM, and 7200 RPM hard drives, which make Linux MUCH
faster than Vista and much more functional.
Dell buys the license whether you actually use it or not. The problem
is that they can't ship you the installation media unless you accept
the machine with Windows pre-installed. It's pretty clear that Dell
would LIKE to be able to ship machines with Linux as the primary
operating system and Vista or XP as a "Virtual Client", similar to the
configured on the Apple iMac. Such a machine would naturally cost
more. Apple typically gets almost TRIPLE what Dell or HP get for a
comparably equipped "Vista Only" system.
Dell and HP have tried packaging like Apple's, but even this has shown
to be vulnerable to price erosion duo to the lack of desire for Vista.
> - Dell makes a profit on the Windows and the installation of crapware.
Actually, on many PCs, Dell actually LOSES money on the sale of the
PC, including the crapware, but they try to make it up with service
contracts, replacement contracts, and accessories and peripherals like
HDTV systems or flat screen monitors.
> - Microsoft makes a profit, and convinces Joe Public that
> Windows is cheap or "free" on a new machine
Joe public knows that they are paying some sort of premium for
Windows, but it's not like they actually have a choice. People who
really don't want or need Windows purchase "White Box" machines (which
make up almost 60% of the total market now). Ironically, Acer, ASUS,
and Everex were leaders in the "White Box" market and Microsoft has to
work much harder to keep them interested. In many parts of the world,
these companies, along with C4 and some other big "white box" makers
even ship machines with "No OS" or "Linux" preinstalled, and the
prices are often substantially lower because Linux is less resource
hungry. Acer, Asus, Everex, and C4 make full size Linux laptops with
1-2 gigabytes of RAM, dual core AMD processor, and 160 Gb hard drive,
for almost a third of the price of Vista machines, which need 4
gigabytes of RAM, 200 Gb drive, dual core Intel processor, and Vista
preinstalled along with the "try office2007 and we'll bill your credit
card if you don't remove it in 30 days" offers.
> - The Linux user gets a cheaper machine than buying one with Linux pre-loaded!
The (incorrect) assumption is that a Linux user needs all of the extra
RAM, CPU, and hard drive that Vista needs, and will perform exactly
the same in terms of responsiveness and capabilities as the Vista
system. If you have all that extra resource, Linux can do much more,
and in much less time, or it can even run Windows XP (Downgrade)
"Appliances" as clients just like any other Linux application.
If the OEM could get Microsoft to agree to it, they would probably
want to install Linux as the primary OS and then install XP, Windows
2000, or a "Vista Lite" as a client operating system.
> However, what has cheered me throughout on pre-loaded Linux offerings is that,
> almost by definition, the manufacturer is selling a true "Linux-ready"
> machine.
The problem that the OEMs have is that many retailers are afraid to
display the "Linux Ready" systems. They are afraid that Microsoft
will retaliate. They are afraid that customers will ask questions
their sales people can't answer. They are afraid that some other
store down the road will be better at selling Linux than they are.
They are also afraid of price erosion.
Unfortunately, Vista has already turned all of those fears into a
reality. The retailers are feeling the pain of price erosion even
more than the OEMs. They often get stuck with unsold inventory that
has to be marked down to below cost just to get it off the shelves.
They have to clear out the old inventory to get the new machines that
are supposed to be able to run Vista better. But even these quickly
erode, often more than 50% in less than 3 months. Ironically, the
only stores that don't seem to be suffering from price erosion are the
ones
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