Microsoft to send cut-price XP to Asia

Microsoft would start selling a cut-price edition of Windows in a trio of Asian countries in spring, the software giant said yesterday.

Dubbed Windows XP Starter Edition, the stripped down operating system is Microsoft's attempt to battle back against software piracy and the growing popularity of the lower cost, open source Linux OS.

Microsoft is calling the sales a "12 month pilot phase to study and evaluate the benefits created for first time PC users, software and hardware industry partners, participating governments, and Microsoft" by countering pirates and Linux with a OS priced to better match local standards of living.

Not surprisingly, Starter Edition will first ship on inexpensive PCs in Malaysia, Thailand, and Indonesia. The developer had already rolled out localised Windows XP-Office XP bundles in the first two nations, and Microsoft had previously announced it was negotiating with the three governments.

"I see Starter Edition as a good effort to break into these markets where Linux is an emerging threat and piracy an even greater threat [to Microsoft]," said Joe Wilcox, an analyst with Jupiter Research.

But he's not sold on the idea. "My concern is that rather than discounting Windows, Microsoft is de-featuring and discounting it. I can understand the reasons - Microsoft doesn't want to threaten its core markets - but I don't know if this is the best way to combat piracy."

The problem, said Wilcox, is that users will be faced with choices that don't necessarily lead them to Starter Edition. "Are things like the localisations of Starter Edition enough to make the de-featured version more attractive than a low cost, full pirated version? Why not just get the pirated version [of the full Windows XP]?"

Microsoft has not yet set the price of Starter Edition in the initial three countries, but will do so as the October rollout approaches.

Microsoft also said it was close to agreement with two more countries, but wouldn't name them, saying only that they would be announced later this year when discussions finalise. Some suspect that Brazil, China, India, and Russia are the next likely participants. At July's financial analysts briefing, for example, Will Poole, senior vice president of Microsoft's Windows client group, said these four countries "are the big dogs of emerging market opportunities."

China however, seems a long shot, said Wilcox.

"China has every reason to build up its own indigenous software economy," Wilcox said. "They can't do that by bringing in Microsoft, but they could by bringing in open source or Linux.

"Microsoft's worst nightmare is for a China or India or Russia to develop a successful software industry that could export Windows and Office wannabes," he added.

But by taking the battle to Linux and software pirates, Microsoft opens itself up to questions from users in wealthier countries.

"It raises the question, 'Why can't you sell it here?'" said Wilcox. "Seems to me that you could argue that there could be a market for a de-featured Windows here, an operating system for those who primarily use the web and email.

Microsoft refused comment on possible plans to introduce Starter, or something like it, to other non-emerging markets.

But the company did divulge specific information about what the Starter Editions will contain. For instance, the bare bones OS' screen resolution hits 800 by 600, it lacks support for home networking and shared printers, and only allows three programs to be running simultaneously.

Starter Edition disables features rather than strip them out, said Matt Pilla, the senior product manager for Windows and Simon Earnshaw, Windows' lead program manager.

"We've made certain things inaccessible from the shell," said Earnshaw, "but the core bits are the same [as Windows XP]."

The difference is significant, at least to those with legal memories, for during its anti-trust battles with the US federal government and various state governments, Microsoft argued that features could not be removed from Windows without breaking the operating system.

"A lot of the components like Internet Explorer and Media Player are untouched in Starter," said Pilla. "In fact, they form the crux of its functionality."

Internet Explorer and Media Player were among the components governments have called on Microsoft to remove from Windows, but again, the company has maintained that they're embedded so tightly with the OS that they can't be touched.

Although Windows XP Starter Edition is essentially the same size as more robust versions like Home and Professional, the OS runs fine on the very entry-level PCs that will run it, claimed Pilla. "One way we've maintained performance is to disable [CPU and memory intensive] services that aren't necessary," he said, including Universal Plug and Play and wireless networking.