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Re: [newtech-1] ?This really wasn?t what our customers were looking for?

From: Asif Y.
Sent on: Friday, March 14, 2008 12:24 PM
Michael Mellinger wrote:
> You left out the first sentence.  I think it's relevant.
> 
> "Newsflash from ASUS - the company is predicting that the XP Home
> version of the Eee PC will outsell the Linux-based version by 3 to 2.
 >
> 3. They ship with Windows XP (Home Edition), which is being
> discontinued in June.
> 
> 4. You can always upgrade to the latest Ultimate version of Linux on
> the Eee, but you've hit a dead-end with XP.
> 

Yeah, I think the last one is really the most interesting thing about 
this, not the idea that Windows may outsell the Linux version.

Anyone who is famililar with the way that the market sees OSes knows 
that Windows is a definite winner, not necessarily for technical 
reasons, but because of the major advantages one can reap from using a 
mass market OS with great support.

Anyone who is a proponent of Linux that doesn't admit to this is likely 
being dishonest.

However, at the same time, these network effects can be effectively 
mitigated with software that inter operates with Microsoft software 
(hell, isn't that supposedly one of Microsoft's new goals?) and hardware 
that is Linux compatible.

The fact that the eee sold so well, even with the tremendous amount of 
advantages that Windows commands over Linux likely means one (or both) 
of two things:

	For some people, the cost premium of Windows isn't worth it over Linux

	or

	Linux is "good enough" regardless of price

I'm not even thinking about people who are avowed Linux users, who 
actually prefer Linux, but rather the people who don't really care what 
OS their machine runs, as long as it lets them get their work done.

Linux is definitely moving forward in this direction, as sales can show, 
as will simply playing with the OS on your own -- this isn't your dad's 
Linux, where configuring X was a chore. It's easy to install and work with.

Vista is going to be a problem for Microsoft in the low end. It's so 
heavy compared to Linux, that for ultra cheap commodity hardware, Linux 
may begin taking a lead. Of course, no one in the Microsoft camp is 
scared yet, since they are targeting higher earning users who buy more 
expensive machines and OSes.

But for the low end, Linux based machines may start eating away at what 
has traditionally been Microsoft's winning platform -- cheap hardware, 
along with easily pirated versions of Windows.

What did Bill Gates say about China? something to the lines of "We don't 
care about the piracy as long as they are pirating our stuff. We'll 
figure out how to make money off of them later."

Well, if they start losing that segment now, imagine what happens when 
this groundswell of support from the low end begins to equate into it's 
*own* network effect -- when Linux becomes better supported, and it's 
easier to get *Linux* on your expensive PC rather than dealing with an 
unfamiliar OS that doesn't run your software?

I'm not saying this is going to happen overnight. But the abomination 
that is Vista on low end hardware may end up decimating Microsoft's 
market share in a segment that has traditionally been served by pirated 
copies of Windows.

They may not have made them money, but they helped Microsoft with their 
great ecosystem.

By ceding the low end in this manner, Microsoft may have quite by 
accident given Linux a leg up.

-Asif

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