PC World learned Microsoft will put limitations on the use of Windows XP Home Edition on cheap notebooks. The software maker plans to offer PC makers a big discount to convince them to use this operating system instead of Linux but will require that the devices won't have a display larger than 10.2", HDDs bigger than 80GB or a touchscreen.
The program is outlined in confidential documents that Microsoft sent to PC makers last month, and which were obtained by IDG News Service. The goal apparently is to limit the hardware capabilities of ULPCs so that they don't eat into the market for mainstream PCs running Windows Vista, something both Microsoft and the PC vendors would want to avoid.
Imposing the limitations solves a number of problems for the PC industry, said industry analyst Roger Kay, president of EndPoint Technologies Associates. "It allows PC makers to offer a low-cost alternative, and it prevents eroding of pricing and margins in the mainstream OS market," he said.
Microsoft declined to comment on the documents. "We don't speak publicly about our agreements with [PC makers]," the company said in a statement via its public relations agency.