Windows 7 price eats at netbook profits
I’ve written a lot of posts on netbook figures and state of the industry in the last few days. I focus heavily on the fact that profits are going down and netbook manufacturers will need to address this issue soon. I was so focused on the hardware costs, I forgot about the software costs. Thanks to a post I happened on at GigaOm “Windows 7 to usher in Profitless Prosperity,” here’s a quick glance at the effect of software prices.
The staff at GigaOm bring up good points. For instance, it’s easier to get brand new feature-filled notebook for less than $800. That Apple has played hooky and sidestepped the trend of cutting down prices (for it’s MacBooks, not the iPhone 
). And the fact that competition in the OS market is slowly stepping up – Windows 7 coming out soon, Google’s Chrome OS scheduled for next year, Intel’s Moblin making it’s debut in a Dell netbook…
Windows 7 has received glowing reviews and a lot of hype. A lot of netbooks and notebooks will be expected to ship with Windows 7 come November. Netbook manufacturers are then in a catch 22 -sell Windows XP running netbooks for less, or Windows 7 netbooks for more, or Windows 7 netbooks for less?
Seems like Windows 7 is banking on making netbook manufacturers bear the financial brunt. Why wouldn’t they? They’ve lost out on a lot of potential profit as millions of netbooks shipped with Windows XP. Considering they’re a large corporate, they probably spent a lot of money on making Windows 7. It only makes sense that they would target netbook manufacturers over end users (which they’re doing anyway).
So now you really have to feel bad for netbook manufacturers (and probably notebook manufacturers too). Windows 7 is going to reduce their profit margins even more!
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Filed under: Netbook Analysis, Windows 7 Netbook