Netbooks could be Microsoft’s revenue hope for Windows 7

If you buy a netbook your choices are really Linux or Windows XP. By the end of the year Windows 7 will be a further option. However what you’ll find is a cut down Starter version of the OS installed with the full edition tucked away waiting to be activated at the touch of a credit card. To encourage this upgrade users will only be able to run three applications at a time with the netbook version.

In theory this isn’t too bad that could be a web browser with your web mail in one tab and your favourite sites on others a game of online poker in one and the word processor that you should be working on as the third application. However look at your desktop now — it’s likely you’ve got a couple of other things running too.

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However netbook users will be buying these machines on the basis of their budget – wouldn’t we all rather have a shiny new Mac Book! So it may be quite a while before they have the money to upgrade the OS if at all or may end up being quite happy only running a couple of applications at a time.

Microsoft may be confident in this approach and even with a moderate uptake of the upgrade offer given the huge sales of netbooks it could still help boost Windows sales and improve Microsoft’s bottom line. Others don’t seem so sure a Bloomberg article lists quite a few doubters including Intel boss Paul Otellini.

Effectively Microsoft is using the Starter version as a foot in the netbook door to prevent Linux (and oddly Windows XP) getting a wider hold in the netbook market. It realistically can hope that a decent flow of upgrades will help its revenue but if Microsoft is hoping for a torrent of upgraders it could be a long time waiting.