Intel and Microsoft could be limiting netbook innovation with cartel
style collusion. The companies have reportedly reached an agreement to restrict the upper screen-size
on netbooks running Windows 7 to a mere 10.2 inches. OEMs that exceed
that restriction will not qualify for the reduced Windows 7 licensing
rates that Microsoft has promised netbook makers.
In its report about the agreement, Digitimes pointed out that the
licensing deal will likely harm Intel competitor VIA Technologies while
propping up Intel's own Atom platform. The restriction is also expected
to end OEM's production of 11.6-inch Atom Zxx-based netbook product
lines.
Microsoft has the right to define what device constitutes a netbook
for pricing purposes, and I accept its right to do that. In fact, its
hardware requirements have reportedly become more liberal. Techarp
scored a great scoop if you want to know the details.
Ultimately, OEMs like Dell will vote with their feet, and preload other operating systems such as Google's Android
or Linux onto their products if they don't like what Microsoft has to
offer. It's just important that OEMs be free to do that without fear of
retaliation from Microsoft.
The issue that bothers me is if there is collusion between the
industry's two largest players to define precisely what constitutes a
netbook - down to .20 inches of screen real estate. Netbooks are lower
cost devices designed for running Web applications and surfing the Web. They could also become media centers if their screens are large enough to enable HD video playback.
CPU and RAM may be one thing, but there is no rationale for limiting screen size. It is also not
Microsoft's right to do so if it can influence netbook category beyond Windows. Intel and Microsoft could harm innovation by imposing that
restriction via Windows 7.
Netbooks sales are skyrocketing
amid the worldwide economic downturn as people take more time to assess
their computing needs. Netbooks are a good solution for many people,
and they also save energy. Traditional laptops offer far more computing
power than most people need, and the economy has helped people to make
that realization.
Microsoft's Windows client revenue falling, and netbooks are a root cause,
according to the company's financial reports. Intel also faces pressure
from VIA and other chipset makers including NVIDA, which makes netbook chipsets with HD video that may not look great on a 10.2" screen. Those two companies are now
allegedly dictating what constitutes a netbook.
Setting Windows price lists is one
thing; defining the category with the world's largest chipmaker is
another. Why sell people one machine when you can sell them two?
A friend just told me "the old Wintel is now at powerful as the new
one," and I realize that there is a lot of logic in that argument.
However, they are still the world's #1 software and hardware makers,
and both are convicted monopolists. They could conceivably slow the
category's growth with their influence. I'm really hoping that it's
just the coffee, and that I'm not reading too much into this report.
Feel free to disagree.