Low price notebooks challenge Microsoft

       High competition in the low cost notebook market has forced global computer vendors to stop offering notebooks with genuine Microsoft Vista operating systems to reduce prices. Such a move may become the next challenge for Microsoft to gain ground for its new OS.
       Prasert Charoonpaisal General Manager, Personal Systems Group (PSG) HP Thailand, said that every Pavilion notebook is preloaded with Microsoft software but the Presario notebook, which is priced below 20,000 baht, may not have preinstalled software.
       This segment contributes 25 percent of the overall HP revenue and has fierce competition when combined with software priced around 3,000 baht, which is a significant amount to consumers who have limited budgets.
       The sum of 3,000 baht which is equivalent to $100 is not much in the US but in Thailand, which has an average per capita income of 8,000 baht per month,it is significant. If Microsoft would like to address this market when it launches Windows 7 the price should be more attractive and consumers should be educated about the difference between Vista and Windows 7.
       Meanwhile senior marketing manager for Acer Thailand, Nitipat Praweenwongwuthia said that Acer will not preinstall Windows in notebook models under 20,000 baht for quite a long time because this segment is price-sensitive. If it offers preinstalled software while other competitors offer it at the same price but add more hardware specifications without preinstalled software, consumers will tend to buy better hardware features.
       The answer is to boost the use of genuine software in this segment depending on how well Microsoft can educate consumers about the benefits of Windows 7 and make most vendors preload software.
       Another source from the industry said if Microsoft would like to regain the market in the segment below 25,000 baht it should price the Windows 7 Home Basic or Premium at no more 1,500 baht per licence.
       Consumers do not prefer Windows Starter Edition and today the under-25,000 baht notebook segment contributes between 30-40 percent of the overall notebook market.
       Pairoj Amatamahutana, vice president at IT City, said preloading software in notebooks will help Microsoft to boost its value lost to piracy because big players in the market do not preload software in entry level notebook models to offer more attractive price and make it more price competitive.
       Conversion of software costs around 3,000-4,000 baht which is a significant percentage of the total unit cost.
       He estimates that currently, in the retail market Microsoft product has a piracy rate of around 80 percent. If the company can reduce this ratio with more attractive pricing which is suitable for the country's per capita income it will help to reduce the problem.
       Over the last few days Microsoft and IT City have offered Microsoft Office Home & Student Edition at only 2,690 baht with three license users which has helped to boost sales by three to four times.
       "If consumers buy more genuine software this will help us to reduce the problem of maintaining the computer because 80 percent of computer problems come from pirated software which makes it hard for us to handle or fix the problem.Moreover, when users start to buy genuine OS software it will persuade them to buy more antivirus software or others,"he said.
       The company will also take part in the official launch of Windows 7 in on October 31, offering Home Premium edition of Windows 7 at 2,777 baht for the first 777 people.