No 3-app limit for netbooks; Windows 7 pricing imminent?

We’ve already seen the logo heard that the price will be higher and found out other snippets about the Windows 7 launch details. However there is a tough juggling act going on behind closed doors as Microsoft tries to get the feature/pricing balance right for its new OS.

First comes the news that the controversial three application limit on netbooks will be lifted. While it has been proven that this limit doesn’t need to be much of a problem (read Ed Bott’s incisive piece) it does sound rather low to the casual shopper (makes a good scare story for the press) and is more likely to nudge some down the Linux path. It is also something that can easily be fixed by Microsoft.

Instead Windows 7 will detect the specification of your netbook and decide if you can install the cheaper “Starter Edition” version this has some interesting ramifications for the hardware market as the spec between a netbook and a notebook continues to merge.

The three-app limit could be on its way out

Next up pricing for the various versions should be revealed in mid June according to reliable reports. To come to pricing agreements Microsoft will be polling its major customers retailers and squinting into its crystal ball spreadsheets. In these recessionary times there is a thin line between too much and what users will bear but $259 – $269 (US) seems to be the average guesstimate figure for an Upgrade version which translates to $AU349.

However comparison of Vista’s release pricing between the US and Australia showed the price ratio was a staggering 1.91 times more in Australian dollars which means Windows 7 could cost $513 as an upgrade in Australia. Hopefully Microsoft has learned some lessons from Vista and won’t expect Australian customers to cough up a lung just to bring their computer up to date.

The big unknown is that three years ago Windows Vista had more limited competition and managed to shoot itself in the foot once the technical issues started to show. Microsoft has fixed those problems but now Windows 7 is being openly challenged my Apple and Linux – bright and bold in stores around the world not just on PC forums. For example while Windows XP and Linux netbook prices aren’t that different if Windows 7 adds much of a premium sales could rapidly slide in favour of the Linux-based machines.

Similarly Dell and other PC makers are desperate to sell their higher-end machines where they make more money. If for example Dell has to stick a noticeable additional sum on Windows 7-equipped machines it may well be forced to start adding a little drop down menu in the options with “Linux preinstalled $0” as an option. You can bet others will follow.

All-in-all Windows 7 despite all its acknowledged technical improvement is going to be a tough sell. Few customers enterprise or consumer are upgrading or buying new machines few have the money to just “splash out.” So Microsoft’s job is to make the sell as palatable as possible (so goodbye three-app limit). What else can it conjour up in the last few weeks before the wraps come off it’ll be interesting?