Ed: Why Microsoft Won't Price Win7SE High

Last week we ran a story on how older Intel Atom-based netbooks may not be getting OEM-upgraded to Windows 7 due to cost issues.

The bigger issue at hand rather than which old netbooks will get Windows 7 is which new netbooks will get the OS.

A Windows XP license for netbooks currently costs OEMs around $25 to $30, (of which Microsoft makes a profit of $15). But according to Digitimes, Microsoft is asking $45 to $55 for the cheapest Windows 7 license, presumably Starter Edition, which will drive prices up in an already very price-sensitive segment and time in the economy.

Many media outlets took the above pricing estimates – which haven’t been confirmed by Microsoft – and are running stories that Windows 7 would be priced out of reach for budget netbooks. While it’s plausible that Microsoft will be charging more for Windows 7 licenses than it does currently for Windows XP, it’s unlikely that the world’s largest software maker would purposely bump itself out of every market. After all, is there any market that Microsoft isn’t interested in tapping into?

Furthermore, Microsoft has boasted on multiple occasions about how Windows now holds a 98 percent share of netbooks sold today. The netbook market started off with one that was dominated by Linux-based OSes, but Microsoft quickly took over in the span of a year. Microsoft simply isn’t going to let go of that market share, especially not in netbooks, the fastest growing the PC segment of 2008.

We’re going one-on-one with Microsoft on Wednesday morning to get a better understanding of the company’s strategy on netbooks and Windows. If there are any burning questions that you have on those topics, please let us know in the comments below and we’ll try to address them tomorrow.

Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
  • rigaudio
    With the 3-program limit gone, what incentive are they providing for a user to upgrade? Can current netbook hardware run W7SE as well as XP?
  • Marcus Yam
    Good question. I'll be sure to put it on my list. Keep them coming!
  • coopchennick
    ask them how much home premium will cost!!
  • Hatecrime69
    Though in my opinion, microsoft may be leveraging the 'you have no choice' option when they finally do stop selling xp
  • chunkymonster
    Will Microsoft drop the price of Retail and OEM versions of XP and Vista 32/64bit with the release of Win7?
  • smalltime0
    chunkymonsterWill Microsoft drop the price of Retail and OEM versions of XP and Vista 32/64bit with the release of Win7?XP will be gone
    But Vista prices may go down
  • aspireonelover
    I might just as well as to buy Windows 7 Home premium and upgrade the OS myself. I don't care about the price, it's just better than the Starter Edition in many ways ;)
  • acecombat
    rigaudioWith the 3-program limit gone, what incentive are they providing for a user to upgrade?Screen size, resolution, maximum hardware specs and unable to change wallpaper/themes restrictions are inplace for starters!
  • computabug
    smalltime0XP will be goneBut Vista prices may go downI thought 7 was going to replace Vista? As in vista disappears and XP remains as a low end alternative for low end set-ups... like my dad's ^.^
  • willv
    why is windows 7 not free? releasing vista was a crime, and now they want to charge people to buy a new operating system? when will people learn to not trust greedy microshaft