Windows 7 to compete with XP in netbook market

The ageing Windows XP will be offered for netbooks after Microsoft starts selling Windows 7, and buyers' OS preferences will be taken into account for future plans, according to a company exec
Written by David Meyer, Contributor and  Tom Espiner, Contributor

Microsoft will continue to offer Windows XP for netbooks even after it starts selling Windows 7, a company executive has confirmed, saying it will take customer preference into account in its netbook OS plans.

Neil Holloway, Microsoft International's vice president of business strategy, told ZDNet UK on Thursday that the company expected Windows 7 to be more popular than XP. However, Microsoft will ultimately decide which operating system it will offer for netbooks depending on customer preference, he said.

"Let's see what the market does," Holloway said at Microsoft's Growth and Innovation Day in Brussels. "As we introduce Windows 7 for netbooks, the availability of XP will be less and less. I think, on this one, the market will decide on Windows 7."

The unanticipated success of the netbook market over the past year-and-a-half has forced Microsoft to repeatedly postpone the retirement of Windows XP, mainly because its newer Vista operating system was too processor-hungry to run on the devices.

Holloway's comments suggest that Microsoft will delay the demise of XP even longer. That will effectively bring the ageing operating system into competition with the upcoming Windows 7 Starter Edition, which is aimed explicitly at netbooks and is expected to arrive around the end of 2009 or beginning of 2010.

Microsoft gave its first indication of this in April 2008, when it said Windows XP for ultra-low cost PCs would be offered until 30 June, 2010, or a year after the release of the next version of Windows.

Although Windows 7 is built on the same underlying architecture as Windows Vista, Microsoft has repeatedly stated that the upcoming operating system is more lightweight than Vista and therefore more suited to netbook use.

Last month, Microsoft chief Steve Ballmer said people who buy a netbook with the Starter Edition of Windows 7 will be offered the opportunity to trade up to a more fully featured version of that operating system. Holloway confirmed that this would happen.

"You could have a low-end [Windows 7] netbook or a high-end netbook," Holloway said. "The question is, do you have reduced Windows 7, or the next level up, with more functionality?"

Holloway compared it to the situation with Vista: people will be able to select the version of Windows 7 that suits them, in the same way they can choose the Home Basic edition of Vista rather than the Ultimate edition, depending on their computing need. He added, however, that the offer of a choice of versions of Windows 7 will depend on the outcome of Microsoft's licensing negotiations with netbook manufacturers.

The first netbook — the seven-inch Asus Eee PC — was introduced in 2007, and it used a Linux-based operating system. A year ago, Microsoft announced a deal with Asus to provide netbooks running XP at the CeBIT trade show. Since then, Windows XP has become the dominant operating system in the broader netbook market.

"When [netbooks] first started they were 100 percent Linux. We didn't have an operating system or pricing," Holloway said. "These days we are tracking 90 percent-plus running on Windows. If we are late to the party but still end up with that market share after 12 months, then we are not doing too badly."

Also on Thursday, Holloway said Microsoft was in talks with mobile operators to see Windows 7 bundled with mobile-broadband-enabled netbooks.

Editorial standards