Microsoft to Sell PCs, Starting in India

kripkenstein writes "According to an Ars Technica report Microsoft will begin selling complete PCs, for the first time in the company's history. The program is aimed at customers in India. 'Dubbed the IQ PC, the machines will cost RS21,000 (about $525), are manufactured in partnership with Zenith, and will sport AMD Athlon CPUs. ... In some ways, the move to sell hardware is a natural extension of Microsoft's low-cost Windows initiative ... It may also be a response to projects like Intel's Classmate PC and the OLPC XO.' The Ars Technica summary is careful to state that they seriously doubt this will lead to Microsoft selling PCs in the US, yet the question must be asked: After Microsoft mice and keyboards, then the XBOX and Zune, Microsoft is increasingly becoming a hardware vendor. Is it only a question of time before Microsoft starts to compete directly with the likes of Dell and HP?"

Comments

oh but of course

[bmecoli]

I mean the best place to sell PCs would be the place where all the tech support is, right?

Re:oh but of course

[sconeu]

And this is the argument as to why MS won't sell PCs in the US.

They won't be able to foist off level 1 tech support onto the vendor, as *they* would be the vendor.

Re:oh but of course

[Rob T Firefly]

You would think so, but it turns out the Indian customers' tech support line will be answered by some underpaid guy in New York who speaks broken Hindi with a Brooklyn accent.

Re:oh but of course

[sconeu]

Since when has the Antitrust settlement stopped MS from doing anything?

Good for them...

[chris098]

This really is just an extension of Microsoft's business model. From the article:

Aimed primarily at students...

If they can get students hooked to MS products when they're young, especially in these developing countries where the alternative may be Linux, then it's likely these students will continue using Microsoft later on in life, because they're familiar with it. It's a clever move, and really, I'm surprised it took Microsoft so long to start doing this.

Re:Good for them...

[Spy der Mann]

This really is just an extension of Microsoft's business model.

Yeah, but shouldn't they change their name from Microsoft to Microhard ?

Um... wait... nevermind.

Re:Good for them...

[brewstate]

I believe RJ Reynolds, Winston, and Marlboro got in trouble for similar tactics the difference was the level of the crash.

All the more reason for Dell to sell Linux

[slazzy]

Time for hardware vendors to start selling more PCs preloaded with Linux. Why sell Windows when Microsoft is your competition?

Re:All the more reason for Dell to sell Linux

[CastrTroy]

Seriously. It's not a good idea for MS to mess with their distribution channel. With Dell starting to see Ubuntu, it's not a good idea to give the vendors and more reason to push Linux on their customers.

Re:All the more reason for Dell to sell Linux

[jellomizer]

Competition != Mortal Enemies.
Adobe doesn't stop making products for Apple just because Apple has competing software. Same with Adobe not making software for Microsoft because Microsoft sells competing software. Unless Microsoft starts giving their PC some unfare advantage over the other ones. Then HP and Dells will compete with Microsoft on the Hardware end and will be partners on the software side. If microsoft tries to hard to monopolize the PC market that could leave an opening Linux and Apple. (Apple saying well if you go with windows + MS BOX, you are stuck on MS Box and windows) If you are going to be stuck you might as well be stuck with a better system. And the other guys will probably go with Linux if Microsoft starts giving window + MS Box an unfare advantage. This will only happen if Microsoft tries to be Apple

Re:All the more reason for Dell to sell Linux

[morgan_greywolf]

why not just bribe the OEMs who sell there to preinstall Windows?

...like they do here in the U.S., I presume you mean. Because unlike in the U.S., Microsoft can't bribe the politicians as easily in other countries. Why do you think the E.U. is giving Microsoft such a hard time? The U.S. government doesn't give Microsoft such a hard time because Microsoft bought and paid for a whole lot of politicians.

Re:All the more reason for Dell to sell Linux

[bobcat7677]

[Slightly off topic rant from an American...International readers please excuse me.]

Politicians shouldn't be allowed to receive funds, air ads, or otherwise "campaign" for election. We should receive notification of whom has "thrown in their hat", have the opportunity to see them participate in fair debates to base our votes on. Level the playing field so we can elect the best candidate regardless of their social or economic circumstances. Instead of having media blitz races where the candidate with the deepest pockets and more cunning script writers wins.

Emulating Sun and Apple

[Ngarrang]

Sun and Apple have made quite a good bit of business with this model. I am more surprised that Microsoft did not try this years ago.

Re:Emulating Sun and Apple

[shaitand]

'Sun and Apple have made quite a good bit of business with this model. I am more surprised that Microsoft did not try this years ago.'

I'm not, Microsoft's profits have dwarfed those of Sun and Apple combined and have relied on NOT doing this. Don't you think Microsoft selling PC's without paying themselves any licensing costs is going to have the likes of Dell and HP jumping the Microsoft ship faster than you can blink?

You would have to be crazy to promote windows when Microsoft has an inside edge on windows that assures nobody will have a computer that runs as well as those from Microsoft. Microsoft can do anything they want, including intentionally altering windows in ways that will cause it to misbehave on competitor hardware. This is a conflict of interest so glaring that is insane.

MS might get away with India... or not if the hardware companies are bright. But if MS takes this very far you will see a great deal more HP and Dell support for Linux and customization of Linux to work perfectly with their own hardware.

Re:Emulating Sun and Apple

[Hawthorne01]

They did. It did ok overseas, not so well in the U.S.

For Years Microsoft has been neutral to OEM's

[number6x]

For Years Microsoft has been neutral to OEM's. Could this move drive a further wedge between leading PC vendors and MS?

Is it a sign that Microsoft understands it cannot require OEM's to stop from selling alternate OS's and must enter the PC market itself?

Or is MS just licensing its brand name to go on the outside of the computer and making money for very little cost (something MS is good at)?

long term....

[apodyopsis]

Will this prompt the big manufacturers to ship more Linux PCs?

The natural suspicion is that this will eventually lead to whole PCs elsewhere in the world and not for just academics/students. Long term Dell, Gateway and the crowd should be eyeing this carefully I should think.

The writers may doubt it, but even in the FA "..if Microsoft sees success in India, similar partnerships may be forged in other emerging markets".

anti-piracy commoditization

[Speare]

It's simple, really. If the market doesn't see software as a product, but rather sees software as inseparable or an ephemeral customization of the hardware "appliance," then the only way to make a profit on software is to bundle it and make profits on the hardware it's installed.

Rarely do people copy a completed MS Word installation from one machine to another. They copy an installer. If there's no installer, there's one piracy vector down. If all the machines have equal deployed software images, that's another piracy vector down. However, if all the machines are alike, but some don't come with the Office and some do, will they start to copy those post-install files and try to get them to work anyway?

Well

[also-rr]

Given that Dell has started selling Ubuntu, and Intel has written real OSS 3D drivers for it's hardware (along with decent wifi drivers, making laptop support trivial for many, many people) maybe they think that any goodwill which previously kept them out of the hardware business is no longer an issue.

Re:Not Dell and HP...

[Intron]

HP used to be very competent in a small set of areas: the Alpha chip, Tru64 Unix, etc. Realizing that, they killed off those products. Now they are equally competent in all areas.

Wintel?

[Brian Gordon]

What happened to the MS/Intel alliance of old? Microsoft getting annoyed at Intel making chips for Apple?

Re:Wintel?

[EjectButton]

What happened to the MS/Intel alliance of old? Microsoft getting annoyed at Intel making chips for Apple?

Apple has nothing to do with this, Intel is fairly opportunistic and they see there is a significant potential for Linux growth over the next few years and having Intel hardware be the hardware of choice due to superior driver support can only help them. They have traditionally provided fairly good hardware support for Linux on the server side of things for obvious reasons, it appears that this is now being pushed out to more desktop/notebook oriented hardware. Most likely in anticipation of desktop Linux growth, especially in the corporate/government universe.
As far as a MS/Intel alliance, there has not been one to speak of for several years now. It's not that Intel is above collusion or dirty tricks, for example there was that deal they struck with Skype a while back trying to get Skype crippled on AMD processors. It's just that Intel, and many other hardware companies have felt for years that Microsoft is holding them back.

From Microsoft's perspective they have been in a position where most computer users in the world have to pay them a "Microsoft tax" if they want to or not, so the less things change the better because any radical hardware or usage changes (the internet) can only hurt Microsoft rather than help them. This clashes with the goals of most hardware companies, which are to one-up the other hardware companies and crank out new hardware revisions constantly to keep people in the habit of upgrading every year. Graphics processor capabilities have been advancing at an incredible rate the last few years, this is largely because gamers are constantly looking at upcoming games and thinking to themselves "man I'm going to need a new video card when that comes out". What would be an equivalent event for replacing the rest of the hardware in the computer? Perhaps the release of a new operating system, though this doesn't really work when it takes Microsoft 5 years and lots of delays between each version of Windows with only marginal changes, most of which have scared the corporate/government customers away from upgrading.

There has been bad blood between Intel and Microsoft for many years now, if you want further evidence here is an interview from late 2005 with Avram Miller Intel's "Vice President and Director of Corporate Business Development" from 1984-1999 http://www.pbs.org/cringely/nerdtv/transcripts/008 .html

Avram:I think another problem was the company was, I think, intimidated by Microsoft. It's easy to be intimidated by Microsoft. Microsoft is intimidating. And I think that many times Intel would have liked to have done something, but Microsoft didn't like it and Intel was basically a little bit afraid of Microsoft.

Bob: I talked to an Intel guy who told me that they were Microsoft's bitch.

Avram: Well, that might be a way to describe it. I wouldn't describe it exactly like that. One of the issues in this was that if you're a software company, you're used to selling upgrades. There really isn't an upgrade for a micro-processor. So, you need to try to push faster and faster the applications that use the power. And in the beginning, the companies were more aligned that way, but over time, they became less aligned that way.

Here is an example from another former Intel executive who testified against Microsoft in the anti-trust trial http://en.wikipedia.org/wiki/Steven_McGeady

* McGeady testified that Microsoft feared competition from Intel's software development: At an August 2, 1995 meeting Bill Gates allegedly threatened to terminate Windows support for Intel's new microprocessors unless they were able to "get alignment" between Intel and MS on Intel's Internet and communications soft

All directions at once

[glas_gow]

Microsoft is simultaneously going in all directions, which is identical to going nowhere fast.

Re:All directions at once

[jbrannon]

Microsoft is simultaneously going in all directions, which is identical to going nowhere fast. I believe that's called "growing".

The Next Step - "Just Add DRM"

[Valen0]

The next logical step is to "Just Add DRM". I can imagine the start up text now:

"There is nothing wrong with your computer. Do not attempt to restart the machine. We are now controlling its operation. We control the hardware and the software. We can deluge you with a thousand windows or expand one single image to crystal clarity - and beyond. We can shape your computing experience to anything our imagination can conceive. For the next session we will control all that you see and hear. You are about to experience the awe and mystery which reaches from the deepest inner mind to... The Microsoft Computer. Please stand by."

As for myself, I think I will pass on the Microsoft flavored Kool-Aid. I tend to get upset when machines start telling me that I can not do [function or feature] with the new [media type or gadget] that I bought because the MAFIAA thinks that disabling [function or feature] is in _their_ best interest.

Re:Retaliation

[LynnwoodRooster]

If I were Dell, I wouldn't be worried. MSFT won't be any better at selling hardware than they are at anything else.

Meaning they'll just make another billion dollars of net profit each month? Such a failure...

Customer service

[Dancindan84]

Is it only a question of time before Microsoft starts to compete directly with the likes of Dell and HP? They're closer than you think. They've already got the same level of customer service.

Growing?

[Tony]

I believe that's called "growing".

I believe they call that, "Flailing."

Like a whale on the beach.

The Customer Wins!

[Bastardchyld]

When someone calls for support on their brand new IQ PC they will be able to understand them...

I can't wait until all of the other corporations start following Microsofts lead and "offshores" their customer bases.

Re:The Customer Wins!

[BosstonesOwn]

No , don't be silly. They will be calling us for tech support. http://www.itworld.com/Man/2701/070612offshore/

Finally they will know how we feel when we call them for support.

Zenith?

[alcmaeon]

Am I the only one here who didn't know Zenith still existed?

Re:India's currency: the Rupee

[ISurfTooMuch]

No offense, really, but I have to repeat what JoeShmoe950 asked. You really didn't know what India's currency is?

Dear Lord, what has our education system come to?

For some more currency fun, watch "The Princess Bride" again (I'm assuming you already have seen it, or you should have) and see if you can identify the two currencies referenced in it.

Re:Microsoft is a software conglomerate

[UncleTogie]

Any idea who makes Microsoft mice? Well, y'see, when a mommy mouse and a daddy mouse like each other a lot....

Waste of Time

[jshriverWVU]

The hardware market for low-middle level consumer PC's is dead. No one really makes any money of selling the hardware, it's selling it and making a few pennies on the bundled software and the service agreements.

Guess MS can make at least $100 per machine, because unlike OEM's they have to pay $0 for the Window OS. That's a better margin than the Dells of the world. Plus they can control the numbers (we sold 10k machines all with Vista).

Re:Not Dell and HP...

[Nightlily]

Or they could have "quality" hardware like the XBox 360. Honestly I think the 360 is interesting but I just know too many people who have had to get the damn thing repaired or replaced.

I'm not saying any hardware vendor has a perfect product line.

I will say their mice and keyboards are ok. Though the best Microsoft mouse I ever had I didn't pay for, I won in a MSDN contest.

I think if Microsoft was really confident in these PC's, they would have launched them in the U.S. or Europe. One problem they may have is that the price they set is too high for some users in India (not all - but some). Also if the PC's are huge failure, it will be easier for them to sweep 'em under the rug.

Going balls against the wall with Apple

[theolein]

This programme has most probably nothing to do with Microsoft selling hardware, but rather Microsoft trying to muscle in on the extreme low end market before it grows so big and full of low cost Linux machines that Microsoft has no chance. Microsoft will most likley use these lowish cost machines plus Vista starter edition (plus bucket loads of arm twisting, bribes and plain threats) to get authorities in developing country to stick with Vista Pirated Edition, since that is what will happen with the machines 5 minutes after they're powered on in any case. Microsoft is not going after Dell, Lenovo, or HP just yet.

However, Microsoft, you can bet your sweet fat arse, would love to build its own machines, so as to especially attempt to beat Apple at its own game of hardware/software integration. This is obvious. Vista copied so many features out of OSX (yay transparent windows and shadows, the calender, Windows Mail instead of Outlook Express, the gadgets in the sidebar, UAC and numerous things) in a transparent attempt to stop users drifting away from MS crapware to Apple. Microsoft entered the portable music player market ONLY because Apple was laughing so hard at Bill Gates every time he started up some new version of MSN music, claiming it would be an iPod killer. The zune may be a joke, but you can bet that MS will work on improving it to try and get it ready for the legendary 3rd revision, by which time MS products are expected to be better than the competition.

You can bet Micrsoft would build its own PCs in a heartbeat to counter Apple if it could. MS is scared silly by Apple. The iPhone is not going to help the fear in Redmond much either, because it is guaranteed to be a huge success compared to MSs Dumbphones. Expect MS to dump HTC and release its own phone in about two or three years.

The only thing stopping MS from making its own PCs is the fact that that is honestly, the only real MS success story. Windows, Office and the Server Windows is where MS makes its money. If MS were to frolic too hard with making its own PCs in the US and Europe, you can bet that Linux would be on the front page of HP and Dells sites tomorrow and that you would have to actually look at who would sell you Windows anymore. (Yes, I'm exagerating, but the OEMs will become OELinux pretty soon, since they would not be able to compete with MS.)

MS would stand to lose vast amounts of marketshare, and they'd still lose, beause no matter how well their machines sold, Apple, in a tight corner, would only have to start selling OSX to OEMs to really bust Redmonds balls.

(rereading this, I wonder just how desperate Ballmer and Bill the dweeb really are?)

Too high by only $20?

[argent]

I'd say it's too high by $100 or so... $525 isn't exactly a low-end price for a computer, even in the US.

Makes business sence

[nurb432]

If they can start selling enough pcs to take over the market, they can get rid of all those pesky resellers that always want discounts, and try to sell 'bare' hardware against Microsoft's wishes.

If they are the only game in town, you cant avoid the microsoft tax..

Thou shalt not screw thy distributors

[symbolset]

LG, to give a brand name more people recognize, is Philips. The game just changed in a big way.

The rest of the top 10 OEMs will not take this lying down. That was their market, and Microsoft was not welcome to it. Microsoft is taking the bread off their table. The objective of this "pilot project" is nothing less than to capture the entire emerging PC markets of India and China, between them nearly half the world's populace. There will be repercussions. As long as Microsoft stayed out of PC OEM land, everybody else was content to play their game. Now it is clear they will not be content with less than Microsoft Brand breakfast cereal. They will not honor the common principles of capitalism - including the commandment in my subject.

Microsoft has treated OEMs like they're sharecroppers on the field of IT, to plough and plant the field and subsist on the gleaning for too long. In boardrooms across the world this is being discussed, and it won't fare well for Redmond.

The top 10 are: HP, Nokia, Dell, Samsung, Sony, Motorola, Siemens, Toshiba, LG and Apple.

Personally I think this is a good thing. Nothing, and I really do mean nothing, could increase uptake of GNU/Linux more than this. It was time everybody knew where Microsoft stood: at the height of hubris.