Microsoft's Netbook Dilemma Indicate Rough Days Ahead for Windows

Fast on the heels of yesterday's news that Microsoft will lift the 3 concurrent app restriction from the W7 Starter Edition, today we're hearing new rumors that  Microsoft is limiting Windows 7 Starter Edition to netbooks with 10.2 inches in screen size or less. What? Say again, please. That would be like setting the price of your next automobile based on the size and surface area of the vehicle's windshield. That's at direct odds with the fact the most netbooks will likely have GPUs, like Nvidia's 9400M used in laptops today (which have more than 10.2 inches of screen real estate.) And external monitors connected to a netbook will surely still have the ability to exceed the size of the screen on netbooks' built in screens.

Why not restrict Windows 7 Starter Edition to netbooks with 15" screens or less? Why not 10.1" screens or less? Or netbooks with less than 250GB of storage? Again, Microsoft is trying to implement licensing restrictions based on some arbitrary metric, screen size in this case, which makes little sense to the market (i.e. the netbook customer.)

All of this wrangling about what limits Microsoft might put on Windows 7 for netbooks is indicative of two things from my viewpoint:

First, sooner or later Microsoft will just have to live with the fact that the only really valid limiting factor is the performance of the underlying netbook hardware. Removing features is problematic because Linux alternatives don't force those restrictions on netbook users. Imposing seemingly arbitrary limitations, like the 3 app and 10.2 inch screen limitations, simply come across as arbitrary at best. It may be heracy to say today, but I actually believe Microsoft will someday (in the not too distant future) be forced to essentially give away Windows on the desktop, thanks to Linux, virtualization, app virtualization and increasingly powerfull SmartPhones (like the iPhone.)

Second, netbooks are already imposing their own limitations on users, because of the limited hardware processing power in the current Atom processors. Anecdotally speaking, my experiences are that computer sales people cautiously sell users netbooks only after they've fully qualified the user based on the limitations of netbook hardware. And where are all the netbooks that are supposed to take over the market? They must be very stealthy because I see very few netbooks in actual users' hands. If you've used a netbook, you know the experience is pretty slow when running Windows XP. I can't imagine the performance will be like when running any version of Windows 7 on netbooks for the next few years or so.

If netbooks do turn out to have legs in the market, Microsoft will have some tough decisions ahead. If netbooks don't take off (my predition, thanks to falling laptop prices and increasingly powerful SmartPhones), then this will all have been more of a distraction for Microsoft than anything else.

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