Recently, Ballmer was speaking about Windows 7 and how the company is hitting the skids financially. As you may recall, revenues for M$ are off 29% from last year, the first time in its history M$ has posted a year to year loss (usually, they can hide behind stock buybacks. Not this time). Ballmer recently laid out the company's strategy to turn its fortunes around. Slashing the prices of Windows licenses to induce third world countries to buy in and for the netbook market haven't helped. ""The theory was wrong. You’ll see us address the theory. We’re going to readjust those prices north [using Windows 7]." In short, M$ is going to try to force the prices of netbooks higher.
So, let's review some facts....
What sold the Wintel computers in the first place was that they were cheap. Or at least, cheapER than the competition. Windows copied the look and feel of the Mac OS at the time so that people running DOS could be wowwed by their machines. Fista's biggest problem is that it copies OS X while requiring hardware that is comparably priced. People with that much cash are simply buying Mac's, presently at just under 10% of the market and selling about 10 milllion PC's per year now (given their growth in the sluggish economy, and the drop in Wintel PC's, it proves people will pay if you give them what they want). Netbooks are intended to be cheap. Kylie, my IBM S10, runs an Intel Atom. It cannot handle some more complex programs even if they would fit a computer with equivalent specs because the low powered CPU is wired up differently for cost savings and power savings. Forcing these $300 computers up will result in a loss in sales.
No, wait. It won't. Because there's an OS out there that runs on hardware that's 11 years old (I know. Pam, my Compaq Presario 1247, is 11 years old). It's called Linux and doesn't cost shit. Netbook makers were already moving towards using Google's Android when M$ squashed Asus' display. Google's Chrome OS is just around the corner. M$, in its recent filing with the SEC, casually mentioned that Intel and HP have partnered to develop Linux-based machines. And here's the key detail -- when the netbook revolution began with Asus, they offered Linux and Windows netbooks, and the market was a 50-50 split. Since the low-cost XP licenses to try and take over the market, it is now 30-70 Linux to M$. All that effort, and they have only enlarged their share, they haven't wiped out Linux. So these cheaper netbooks with Linux, despite being harder to find, will only become more attractive, especially since you can't run just anything that runs on Windows on them anyway. And when people find lightweight apps like Abiword are just fine instead of the $400 lock-in bloatware that is Office, it's going to further erode M$.
People no longer see value in M$, whose reach has finally exceeded its grasp (I'm just glad I got Kylie before I got hit with the price increase for netbooks just for Win7). Ground has already broken on setting up the M$ stores around the country to pimp Win7, complete with a "Guru Bar", a rip-off of Apple's Genius Bars in its stores. I know several coders online just waiting for the stores to open so they can go to the Guru Bars and troll the fuck out of them. And if any of you think M$ is quality, I will simply leave you with this picture, from a presentation Ballmer gave. Notice not only the spelling error, but the computer running the PowerPoint presentation:
Low cost made M$ the public leader. They are about to become their own worst enemy.