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Hardware 2.0

Adrian Kingsley-Hughes

Windows 8 to increase PC production costs

By | October 25, 2011, 4:35am PDT

Summary: ODMs and brand vendors squabble over who will cover the additional costs.

Microsoft’s new Windows 8 OA 3.0 verification system will add complication and costs for ODMs (Original Device Manufacturers) who create and build PCs for the big name OEMs (Original Equipment Manufacturers). These costs will, undoubtedly, be passed on to us, the consumers.

Note: The DigiTimes piece inaccurately refers to OA 3.0 as being incorporated into the BIOS. What we are actually talking about here is UEFI firmware, which all Windows 8 certified systems must have.

According to DigiTimes, the issue revolves around Microsoft’s new activation system for Windows 8.

For the OA 3.0, Microsoft plans to pre-install the Windows 8 operating system into PC’s BIOS and will have consumers key-in the authorization key to activate the software through an Internet connection and will completely abandon its previous method of using a COA [Certificate of Authenticity] label.

OEM BIOS activation is nothing new. OA was first seen in Windows XP, and OA 2.0 with Windows Vista and Windows 7. Both of these mechanisms are now easily bypassed by pirates looking to install/sell unlicences copies of Windows.

However, now rather than shipping PCs with a COA, keys will be incorporated in the system’s UEFI firmware, and this will increase production costs for ODMs because each machine will require individual attention to squirt the key into the UFI firmware (rather than just sticking on the COA). Technicians will also require more training. Finally, the absence of a certificate on the machine could also increase costs because of installation overlap (Microsoft charges a per-install fee, so having to install a second key because of an error would increase costs.

There’s also concern about who will bear these extra costs:

The sources also revealed that the ODMs believe Microsoft is playing a two-faced game with the notebook players - on the one hand, the software giant has told notebook ODMs that brand vendors will pay all the increased cost, while they told the brand vendors that ODMs will be responsible for the cost.

One thing is for sure … you and I will be the ones ultimately footing this bill.

(Image credit: jollyUK)

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Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology.

Disclosure

Adrian Kingsley-Hughes

All opinions expressed on Hardware 2.0 are those of Adrian Kingsley-Hughes. Every effort is made to ensure that the information posted is accurate. If you have any comments, queries or corrections, please contact Adrian via the email link here. Any possible conflicts of interest will be posted below. [Updated: February 23, 2010] - Adrian Kingsley-Hughes has no business relationships, affiliations, investments, or other actual/potential conflicts of interest relating to the content posted so far on this blog.

Biography

Adrian Kingsley-Hughes

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology -- whether that be by learning to program, building a PC from a pile of parts, or helping them get the most from their new MP3 player or digital camera.

Adrian has authored/co-authored technical books on a variety of topics, ranging from programming to building and maintaining PCs. His most recent books include "Build the Ultimate Custom PC", "Beginning Programming" and "The PC Doctor's Fix It Yourself Guide". He has also written training manuals that have been used by a number of Fortune 500 companies.

Adrian also runs a popular blog under the name The PC Doctor, where he covers a range of computer-related topics -- from security to repairing and upgrading.

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RE: Windows 8 to increase PC production costs
s2926 Updated - 7th Nov
@Disgruntled M$ User - Don't panic! Non-OEM/old systems will just need the user to type in a Win8 product key - same as always. Otherwise how could MS sell upgrades. etc. What we are talking about here is manufacturers that used to pre-install an OEM key (same key for all systems embedded in hard disk image), will now have to inject unique keys into each system for Win 8. The problem is that these keys are generated by MS but will have to be programmed into the BIOS and this cannot be done at the time of mainboard manufacture - it must be done at system mfr time - this means serious overheads/costs for some system manufacturers.
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To compete with Apple Microsoft needs to tighten its control over OEMs and ODMs. This will be extra cost but I beleive in the end we will get much better products.
@hakanern Hahahahahahaha

Oh wait.. You are serious.
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@nucrash Got to be joking - There will be no 'controlling' the ODM or the brand vendor as they wield incredible power over suppliers (which M$ is, althoughthey -think- they are the apex organism). Day to day with ODM can be like dealing with Darth Vader at times. He was joking, right? or..
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@hakanern
....because I WILL NOT pay extra for a Win 8 certified system!
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Oh boy, the first shill has spoken!
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Then quit talking
William Farrell 26th Oct
@ScorpioBlue
and we won't have that problem.
  • Flagged
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Nope
ScorpioBlue 26th Oct
@William Farrell
Now why would I do any favors for you? Hmm?

But if you really want to help me out then please speak to the FSF and ask them to give me a raise. I really need it, man. Bad.

lol... grin
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Yet, New Technology *always* increases production cost
Dietrich T. Schmitz * Your Linux Advocate 25th Oct
Yes?
Of course!
@Dietrich T. Schmitz * Your Linux Advocate

+1
@Dietrich

Rarely do I agree with you, but . . .

I agree. Totally. New tech always increases costs at first. Not much different than increasing the system requirements.
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It's always like that
Joe_Raby 25th Oct
@CobraA1

Until sales are ramped up to meet production costs, the production costs are always higher.
@CobraA1
If that were true, why is it that Apple is able to release new versions of devices (new hardware and software) at the same or cheaper prices?
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@CobraA1 I observe the opposite! new MP3 players have more RAM and cost less. Another example, with $1000 it is possible to build a very powerful desktop computer. A $2000+ desktop computer 10 years ago is now worthless.
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@CobraA1
The second hand PC market will take a nose dive in a few years when everybody realizes that the cannot refurbish them anymore. So in the long run MS will still win...
So the next big open source move should be to liberate the BIOS!!!
"If that were true, why is it that Apple is able to release new versions of devices (new hardware and software) at the same or cheaper prices?"

Cheaper than what? Last year's model, which is still more expensive than anybody else?
"new MP3 players have more RAM and cost less."

Yes, after the initial price hike, price tends to go down. I'm not disputing that. Once things are in mass production (and MP3 players and RAM are very much in mass production, and have been for a while), prices go down.
@Dietrich T. Schmitz * Your Linux Advocate
+1
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However
ego.sum.stig@... 25th Oct
If what is said in the story is an accurate description of the problem, it's not a cost of a new piece of gadgetry in a new pc that's the issue, but rather a time/annoyance issue that would be generated on the production line. Now that would be a serious bit of slap and tickle for the OEM's to deal with.
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@ego.sum.stig@...

- The assumtion is that someone will be standing there keying in these codes manually, when the truth is that someone will write a script or piece of software that loads and parses a text file with the codes and batch update the firmware. Intial cost for the script or software, maybe a day. After that, it probably takes half an hour to update the firmware 5000 times.

Total cost to OEM: Under $1000. If the OEM sells 2000 computers, thats a $0.50 price hit.

This, in my opinion, is much ado about nothing.
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I'd offer this opinion
ego.sum.stig@... 27th Oct
You probably don't know how much a "little change" like this makes to a production line. It might seem trivial until you have to do it, then the "surprises" begin.
@Dietrich T. Schmitz * Your Linux Advocate : Errr. Unless you build your own compute, if you buy a computer and remove Windows and put on the latest of 200 flavors of Linux of the month, you will pay for it as well.
@Dietrich T. Schmitz * Your Linux Advocate

Exactly +1

@@CobraA1
Because apple has all the manufacturers, banks of surplus money & the consumer base atleast with the ipod/iphone/ipad.
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This will make me feel more and more like a criminal. I'm sorry, but I will not buy a Windows 8 tablet with an embedded Windows 8 key in the UEFI firmware. Take a hike, Microsoft. *sigh*
@Grayson Peddie

Criminal? Why do you pirate Windows? Just curious how having the key embedded in the firmware really affects you or anyone.
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RE: Windows 8 to increase PC production costs
ScorpioBlue Updated - 25th Oct
@bobiroc

Why do you think everybody who opposes this is a pirate? Is that your standard pat answer for everybody who questions this?

This is nothing more than an extension of vendor lock-in, only unlike Apple, Microsoft does not own (or is not supposed to own) the hardware.

I think it's time to give the Justice Department another call...
@ScorpioBlue

He was the one that said This will make me feel more and more like a criminal.. I was merely asking about piracy because he implied that injecting the key into the BIOS/UEFI would make it more difficult to pirate Windows making he him feel more criminal.

He said it and I was merely asking a question
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RE: Windows 8 to increase PC production costs
ScorpioBlue Updated - 25th Oct
Well he didn't pirate Windows, @bobiroc. He just said he won't buy a machine with an embedded key on it, and I seriously doubt there will be many machines out there without it. Which means it's going to be hacked by somebody.

It all could be avoided if the OEMs and Microsoft in a joint statement publically, gave some assurances about this and UEFI.
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@bobiroc

How about if you prefer to run windows in a virtual machine on the same hardware? Of course thats already a difficult task to achieve now with an OEM licensed copy of windows. I really do wish windows would move to a paid support model instead of trying to control every copy of windows. That way you could run any version of Microsoft OS you wanted on any hardware platform you wanted and Microsoft could get paid by providing the value that comes with updating and improving their product. It would be a win/win situation for the company and the consumer.
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@Grayson Peddie

So you won't be buying a tablet at all?

They all use UEFI, to my knowledge, with secureboot.
If they can inject it themselves, then why would the OEM not leave it to the customer? If they can't, then why would Microsoft completely abandon the DIY market? Or the upgrade market for that matter?
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@Michael Kelly
The Linux boys are sure doing a lot of crying since this announcement. What's matter? Can't operate Linux successfully without Windows?? Tough!!
@windozefreak
No. You got it wrong.
We will want to have a little linux as a dual boot option.
That way we can still access our files , when Windows plays up and refuses access.
It does not happen very often, but it does happen.
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RE: Windows 8 to increase PC production costs
Alan Smithie Updated - 25th Oct
We told you there would be nasty DRM and guess who picks up the tab.

Can see a whole host of new malware flashing the firmware and bricking (or ransoming) your nice new W8 notebook.
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Can see a whole host of new malware flashing the firmware and bricking (or ransoming) your nice new W8 notebook.

If that happens, you'll see some returns back to the factory for a refund.
@ScorpioBlue
Then they will get the answer that the owner has messed up the computer and the owner will have to bear the cost.

After a while enough cases may come to see a pattern, which will then eventually the owners will be believed. Unfortunately for the first victims, this will take some time.
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Then they will get the answer that the owner has messed up the computer and the owner will have to bear the cost.

No they wouldn't because I'd call the Credit Card company and dispute the charge. I already had to do that with HP once and I'll do it again.

After a while enough cases may come to see a pattern, which will then eventually the owners will be believed. Unfortunately for the first victims, this will take some time.

No because once I file a dispute and they get wind of it, then they'll avoid any further hassle and take the machine back. That's what you have to do. You have to play hardball sometimes.

As consumers, we still have rights ya know...
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Every network card in existence has a unique MAC address that must be placed in the firmware of the card at construction time. I can by a network card for $20.00 or less. Seems like the individual attention that each card requires to get that unique ID placed in its firmware doesn't cost the manufactures too much money.

Seriously, this is just another piece of FUD.
@hornerea

I agree... I think this will be no different than the OEM customizing the BIOS to include current things like serial numbers, brand logos, and OEM Specific Settings.
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@hornerea The MAC address is a sequential number, not a long "High Entropy" unpredictable number created by Microsoft. The costs will be much higher.
@dswanson2609

It is still a number. Someone has to put the stickers on the case now that match using the COA method. I suspect this will be even easier since it is all electronic and easier to update. They will just add it to the custom script or process where they assign the unique and unpredictable number called the serial number or service tag.

Oh and a MAC address is not a sequential number. How did you come to that conclusion?
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cost has to be low
opcom 26th Oct
@hornerea And some NICs can even have the address changed by commands. No further cost. Thie cost if any would be a larger ROM to hold the install kit if I read the article properly. My worry is that this kind of thing is a back door for M$ or anyone else who assumes enough authority, to enter the PC and brick it without permission from the owner. It could lead to a sudden change to paid subscription licensing for all, which M$ has always wanted.
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@hornerea

Except the FCC is not expecting to get paid a licensing fee for the MAC address to be injected into the network card firmware. I'm sure MS will require a licensing fee from either the ODM's or OEM's in order to inject the OA code.
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And your point is?
Other than the extra effort to install UEFI in the first place and making sure the settings are alright, I'm guessing we're talking less than a buck per machine.

I can see OEMs and ODMs getting up-in-arms about this, as it will mean extra costs overall for themselves, but for consumers, it will be sunk so far into the overall cost of the machine that we won't even see it.
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What is this cost?
NoAxToGrind Updated - 25th Oct
Are we talking 50 cents or two dollars?

SHRUG....
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@NoAxToGrind
My guess is that he's implying that a PC will cost 1999.99 with the added UEFI. happy
@William Farrell
grin. Agreed.
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This is about piracy
Rabid Howler Monkey 25th Oct
From the article:
"OA ... and OA 2.0 ... Both of these mechanisms are now easily bypassed by pirates looking to install/sell [unlicensed] copies of Windows.

In the past, unlicensed copies of Windows had a significantly higher market share than Mac OS X and desktop Linux combined. Assuming that this technology will finally put an end to piracy, will the miscreants purchase a Windows 8 PC or switch to desktop Linux? DTS?
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@Rabid Howler Monkey

Oh please.

Every Windows version since piracy became a big thing has had a big feature that was going to stop piracy. It still exists, and I doubt that this is going to stop it. At worst, it might hinder it for a while until somebody comes up with a way of countering it.

Piracy will continue.
@Michael Alan Goff What about cloning the BIOS/UEFI chips? happy
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@Disgruntled M$ User - Don't panic! Non-OEM/old systems will just need the user to type in a Win8 product key - same as always. Otherwise how could MS sell upgrades. etc. What we are talking about here is manufacturers that used to pre-install an OEM key (same key for all systems embedded in hard disk image), will now have to inject unique keys into each system for Win 8. The problem is that these keys are generated by MS but will have to be programmed into the BIOS and this cannot be done at the time of mainboard manufacture - it must be done at system mfr time - this means serious overheads/costs for some system manufacturers.

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