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Re: Sub-notebooks Are Harming Microsoft (Margins, GNU/Linux Growth)

  • Subject: Re: Sub-notebooks Are Harming Microsoft (Margins, GNU/Linux Growth)
  • From: Rex Ballard <rex.ballard@xxxxxxxxx>
  • Date: Wed, 4 Feb 2009 20:58:34 -0800 (PST)
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On Feb 4, 8:52 pm, Roy Schestowitz <newsgro...@xxxxxxxxxxxxxxx> wrote:

> Netbooks are a win for Microsoft? Think again.
> ,----[ Quote ]
> | And given that price is the most important element of the netbook market, the
> | moment Microsoft feels they've solidified their market share and being
> | raising prices, their share will vaporize.  Linux's existence on netbooks
> | will continue to create a loss for them, regardless of how much "market
> | share" they have.  And the best part is, as people get used to Linux on the
> | netbooks, they'll eventually want it on the desktop as well.  And that's
> | something that Microsoft will do anything to avoid.
> `----
> http://www.raiden.net/?cat=2&aid=521

This sounds like the Microsoft "Corporate Self Defense" argument they
used to justify killing off Netscape and Java using any means
necessary in the DOJ trial.  They couldn't deny that they had gone to
extraordinary lengths to kill Netscape and platform independent Java,
bundling IE with all Windows systems and making the entire IE support
libraries (as well as the MS-Office libraries) part of the operating
system - so that IE couldn't be "removed".

Microsoft is up to their same dirty tricks and is already trying to
start up their Corporate self defense argument as justification for
tactics that the courts will probably rule to be criminal acts
(illegal and therefore subject to punitive damages).

In homocide cases, self-defense is a mitigating circumstance.  If you
can prove that you could reasonably believe that the other person was
about to kill you or someone else, the prosecutor would often
reccomend minimum charge, minimal sentence, and often recommend
probation rather than sending the you to jail.

Microsoft's "Corporate Self Defense" is essentially the same type of
argument.  There have been cases where a judge and prosecutors have
been lenient when the company committing criminal acts because that
company was on the verge of going bankrupt and the victim was trying
to accelerate their decline.

Microsoft makes 75% grows margins and 25% "bottom line" margins.
Higher than anybody else on the S&P 500 and higher than anybody else
in the IT Industry.  Their argument is that allowing competitor
systems like Linux to gain a "beach head" on the retail display floor
would reduce those profit margins.

Meanwhile, in order to turn a Linux sub-notebook into an XP sub-
notebook, the retailer has to add $30 worth of RAM, a $70 hard drive,
and a $30 windows license, so they can sell the machine for $50 more
than the Linux machine.

Linux Laptops vs Vista Laptops are even a bigger margin.  A Linux
laptop can be turned into a Vista Laptop by adding $80 worth of RAM, a
$100 hard drive, a $40 Vista license, additional cooling and power,
and can be sold for about $200 more than the Linux machine.

A "No OS" machine typically has 1 gig of RAM, 120 gig hard drive, and
runs very cool.  There is also no software support required (since you
didn't get any), and there is profit in the replacement program if you
make sure that the laptop can survive a typical drop of 4-6 feet.

In the Middle East, a Windows machine sold for about $1200.  A "No OS"
machine typically sold for around $400.  And the stores loved selling
the "No OS" machines because they were very profitable, and there was
no need to reduce the prices.  The Vista machines would often just
"Rot" on the shelves, becoming "obsolete" before they were sold.

In Europe, Vista laptops were more expensive than Macs

> Microsoft Leaves the Door Wide Open for Linux on Netbooks
> ,----[ Quote ]
> | Windows 7 Starter Edition will also be made available to OEM's for
> | installation on netbooks in all markets. This is presumably so that MS can
> | finally end the sales of Windows XP to the netbook makers. I find it
> | hilarious that Microsoft will offer such a limited, pathetic product for the
> | netbook market. This will be a huge opportunity for the Linux community to
> | educate the public about the plethora of free, feature complete Linux
> | distributions available to run on their netbooks.
> `----
> http://linugadgetech.blogspot.com/2009/02/microsoft-leaves-door-wide-...

A better quote - Vista II - aka Windows 7, is a new low in Licensing

According to an article on Computerworld, Microsoft plans to offer six
different versions of Windows 7. For developed markets, Microsoft will
focus marketing efforts on two versions; Windows 7 Home Premium for
consumers, and Windows 7 Professional for business customers. The
lightest version of the OS will be Windows 7 Starter Edition. It
limits users to a maximum of three open applications. This version
will be intended for developing markets.

Actually starter edition might make a good VM client.

Heck, I'd pay 20 bucks sfor it.

I shouldn't have to pay more than twice the lowest price offered to
the OEMs and that price should be published to EVERYBODY  - not just
the courts.

Microsoft plays too many games with the price spreads to be allowed to
have such a wide gap between MSRP and OEM price.

In Microsoft's world MSRP meansn MicroSoft's Rip-off Price.

The only people who pay MSRP are the people who have Windows
strategically crash to the point where it wont rebooot just before a
critical presentation to a client or customer.  They need to get the
PC working and they have a back-up of the data files, but they have to
go to some store and shell out $300 for Vista and $400 for Microsoft
Office Professional in order to have what they need for the
presentation.  If the client signs a contract for $10 million dollars,
no one will blink twice at the expense report.  If not, the sales guy
could end up paying for it out of his own pocket.

It's almost as if Microsoft "knows" when these critical presentations
are about to take place and the machine strategially fails.  I'm sure
it's just Murphy's law.  Could Microsoft really give Murphy a little

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