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Microsoft Decides To Take On Linux On Low-Cost PCs

e5rebel writes "Microsoft is launching a program to promote the use of its Windows OS in ultra low-cost PCs. It is an effort to stop Linux dominating this market but Microsoft is insisting on limiting the hardware specs of these devices."

37 of 349 comments (clear)

  1. The pitch by Mateo_LeFou · · Score: 4, Insightful

    "For just a little extra money, you can have degraded performance and not have to worry about all that controlling-your-own-hardware nonsense"

    Alas, like most of their similar pitches, I'm putting my money on it working spectacularly.

    --
    My turnips listen for the soft cry of your love
    1. Re:The pitch by Mordok-DestroyerOfWo · · Score: 5, Funny

      Heck, if you cluster 7 or 8 of those bad boys together you could probably run a stripped down version of Vista.

      --
      "Never let your sense of morals prevent you from doing what is right" - Salvor Hardin
    2. Re:The pitch by AndGodSed · · Score: 5, Interesting

      like most of their similar pitches I went for an interview recently, and the owner of the company remarked on my Linux experience and told me how much better the MS environment is for developing in, and how good a "properly set up and maintained" MS server is.

      His pitch was a word for word copy of the MS FUD you get on their website.
    3. Re:The pitch by cpricejones · · Score: 5, Interesting

      I think it's worthy to note that Vista costs as much as the low-cost PCs.

      (I base this on the near 300 dollars for Vista Ultimate and near 200 dollars for Home Basic.)

    4. Re:The pitch by Anonymous Coward · · Score: 5, Interesting

      Yeah but was the guy a chump or was he just baiting you to assess your reaction?

      And just because the guy's a chump doesn't mean that he's wrong. If their cheap hires are *nix illiterate or they suck so badly as an employer that they can't retain staff; then the point-click-drool solution doubtlessly is "better" for them.

    5. Re:The pitch by Anonymous Coward · · Score: 5, Insightful

      ***His pitch was a word for word copy of the MS FUD you get on their website.***

      Perhaps you might wish to consider politely turning down any job offer that results from the interview. There are good reasons for having a Microsoft environment. The beauty and elegance of Microsoft's software is not one of them.

    6. Re:The pitch by AndGodSed · · Score: 5, Interesting

      Let me say this: I did not get the Job, but I am not upset at that, I was going for the interview in the spirit of "if I don't get it I don't mind."

      I have a ton of respect for the guy, he has build a successful business, and is obviously good at what he does.

      We had a frank discussion on the platform they use, and he has worked with Linux before. What I did notice was the aforementioned FUD reference. I'd expect more from a guy like this.

      If the MS platforms were really that much superior to the Linux platforms why not have more specific and substantiated arguments? I smelled either a test, like an above poster mentioned, or he really believed the FUD, since he had no recent experience in a linux environment - by his own admission ten years ago at the newest.

    7. Re:The pitch by RightSaidFred99 · · Score: 4, Insightful
      The fact is that it's quicker to develop high quality software on the MS platform. Their server OS's are generally quite good, and they have a superior level of integration compared to a similar Linux server performing similar duties (e.g. IIS, SQL, Exchange type stuff). I've developed a whole lot of Linux/UNIX software and a moderate amount of Windows software. Developing in Java is reasonably nice, I'd give the experience a 7/10. Developing in .NET I'd give a 9/10. Most Linux people who blather on about Microsoft aren't real developers, or have little or no experience developing modern application software in Windows. Typically they're sysadmin-cum-developers who made the move from sh/perl to PHP/Ruby type environments and now consider themselves uber-developers.

      There are things Linux excels at. Scientific computing. EDA. Supercomputing. Batch systems running certain types of afforementioned applications. "glueware". When we do write Java services for specific reasons (deployment issues into a predominately Linux environment, for example) we do prefer to host them on Linux.

      Microsoft continues to hold hearts and minds of developers simply because they've made .NET so nice and because there's nothing like VS2008+TFS. Continued ranting from the SlashDot crowd isn't ever going to change that, no matter how many stars you wish upon.

    8. Re:The pitch by DECS · · Score: 5, Insightful

      If only Vista had the ability to run across multiple machines.

      Which highlights the HUGE elephant in the room on this issue: the whole thing is a marketing ploy, not a tech related solution.

      The Problem:
      Microsoft is finding its core PC maker customers are bleeding away at the very low end ($300 PCs) where the Windows OEM license is just too expensive to justify. If it allows this to continue, progress made in Linux on those devices will trickle up into more and more complex and sophisticated devices, quickly making OEMs wonder why they're paying for a Windows license on full price desktop PCs and laptops.

      Microsoft's Solution
      Announce that Windows can be stripped down and will be sold for low end PC devices (ie, a marketing announcement).

      The Real Solution Required
      Developing a scalable OS that can actually work on low end PC devices. Currently, Linux scales down much better than Windows XP, and Vista is only getting larger. Microsoft has to invest in stripping down XP, another distraction from Vista.

      Microsoft spent ten years working on WinCE, which doesn't work well enough for anyone to use in the hand held PC realm that it was expressly designed for. If you want to argue about technology limitations of the day, then remember that desktop Linux was being developed at the same time as WinCE, 1998-2008. WinCE can't blame its shortcomings on existing technology of the day.

      There is no evidence that Microsoft has the technical chops to developer a suitable mobile OS. "Embedded XP" is just XP sold to fill the market for PC-based devices. "Embedded CE" is just WinCE sold for non-PDA devices. Microsoft has no mobile OS to sell, and clearly has no ability to develop one anytime soon. It couldn't deliver decent performance in Vista within a half decade of trying, and that was just a PC desktop OS overhaul.

      Linux already works and is free.

      Interestingly, Apple has ported its desktop OS to the iPhone/iPod Touch "WiFi mobile platform" as a low power, flexible, but intentionally limited feature set (ie, not a desktop GUI nor a small laptop), offering a different alternative to Linux based micro-laptops rather than trying to ape them.

      Microsoft should have pursued an original strategy like Apple or delivered a mini-desktop that works like the Linux community. Instead, it's in the position of trying to FUD Linux to death with a press release, despite not having the technology to sell.

      Of course, this has all happened before.

      The Spectacular Failure of WinCE and Windows Mobile

      Zune Sales Still in the Toilet

    9. Re:The pitch by Dutch+Gun · · Score: 4, Informative

      Ok, I guess I'll bite. I'm not a Linux guy - I've messed around with it as a hobby (I've actually been hankering to install Linux on one of my old dev machines and do a bit of freeware game development), but I develop computer games for a living. That means, like most of the industry, I'm using Microsoft platforms and (among some other vendors), their development tools. In general, I've always found Microsoft development tools to be best in class, at least lately. A number of years ago, Borland made the best game dev tools, and then Watcom had its day in the sun.

      At work today, we're using XAML / WPF for some of our newest content creation tools, so I've gotten a chance to play with some of Microsft's cutting edge development APIs. Say what you like, but the .NET platform, C#, and WPF are three examples of pretty innovative and solid technologies that I've seen them come out with. We're building some pretty amazing content creation tools for our designers and artists to use, and we're doing things with them that would be extremely difficult to do using most traditional UI APIs.

      I'm not going to dismiss Linux as a solid development platform. It's got an solid work history, and it, of course, has the obvious benefits of being free and open source. What a lot of people don't seem to understand, though, is that many people really don't care all that much about those last two points. Software development is big business, and developing on Windows is simply the most practical option right now (again, in my industry: game development. I can't speak for yours). Reasons:

      1) Windows is the OS of choice for large-scale game development efforts (both for Windows and console development). Some developers, such as Blizzard, admirably support a variety of platforms. I wish our company did, but there's no real economic incentive to do so. If anyone can successfully make the case, let me know. I'd love to present arguments to our company higher-ups.

      2) It's hard to find developers with the expertise to port to Mac and Linux. The current talent pool of game developers is nearly universally trained with Microsoft tools and platforms. While on-the-job training is nearly always required to some degree, any more required training is a disincentive. Yes, it's a chicken-and-egg problem, but it's a problem nonetheless.

      3) The development tools from Microsoft are excellent. I've seen some cool open-source stuff, and in fact, we do use those tools as well. What's important to us as a development house is productivity, because our real costs are in labor, not software. If buying a few hundred dollars worth of software will save all our developers a few hours (for instance, the company pays for Visual Assist X plugins for developers), it's worth it.

      Say what you like about "point-and-click" developers, but I work on both low-level game engine code all the way up to tools and utilities. The farther down I go in the code, the lower level my style becomes. In my opinion, it's simply smart to use the most appropriate development tools available for the job at hand. When I need to bang out a quick utility to help artists generate a simple XML configuration file, I can create a nice little easy-to-use utility using C# / WPF / .NET in a very short time. When I'm working on a run-time component for our engine, I'm using C++ and optimize for performance. If a "point-and-click" tool is going to improve my productivity and is appropriate for the job I'm doing, then I have no problems with using it.

      --
      Irony: Agile development has too much intertia to be abandoned now.
    10. Re:The pitch by Dutch+Gun · · Score: 4, Interesting

      The thing is and someone else commented on this further up is that developing on Linux is pretty similar to developing with Microsoft's solutions.

      Both have point and click build your own GUI programs. It's just that you use windows at home, work, etc so you build your programs to only work on that OS.

      It's exactly the same as the Internet Explorer only websites from the 90s.

      You seem very familiar with Microsoft's solutions but have you ever truly looked at other solutions? I think not otherwise you would have structured your comment differently. I tried to avoid direct comparisons with Linux products, because, as I indicated, I know much more about Windows / console development than Linux. I'm not entirely surprised to hear Linux has some great point-and-click solutions. I was actually rebutting the common disdain some developers have for these high-level development tools, not trying to indicate that Microsoft is the only one providing them.

      When you say "solutions", are you talking about OS or development tools? With regards to OS, then no, I'm mostly familiar with Windows. As far as development tools, I've used products from Borland, Watcom, Microsoft, and SN Systems. Professionally, though, the game industry is currently dominated by Microsoft's tools. Every single game company I've worked at (five) have used Visual Studio.

      It may sound strange, but most developers I know (including myself) are fans of Linux as a general principle. I've been hankering to install Linux on one of my old dev boxes and work on some freeware games. Maybe I'll actually make this happen in the near future. It might be fun to start another side project.
      --
      Irony: Agile development has too much intertia to be abandoned now.
  2. So... by iminplaya · · Score: 4, Insightful

    You create artificial shortages and cripple the hardware to keep the market from "eroding". I guess we don't don't create markets to sell products anymore. We create them for their own sake. That's quite a monster you got there.

    --
    What?
    1. Re:So... by Tenebrousedge · · Score: 4, Funny

      I am sick to death of Microsoft being in bed with the large hardware manufacturers. I'm sure most other people here are too. I wonder if it's possible to look at this in a good light? Hmm...Spin Doctor says:

      This move will bring the stability and usability of windows to those who have previously been priced out---damn, not working.

      This move will bring the stability and usability of windows to a fresh new market that Microsoft has yet to abuse---dang.

      It's just what everyone wanted---more stripped-down versions of windows!

      I don't think I'm getting anywhere here. Anyone else care to give it a try?

      --
      Those who advocate genocide deserve every protection afforded by law, and none afforded by common human decency.
    2. Re:So... by martyros · · Score: 5, Informative
      You know what's funny, is that just today I took a mandatory online training course on anti-trust regulations, just like everyone in my company does. It was funny reading the article, because like at least 3 or 4 things were specifically mentioned:
      • Predatory pricing to prevent a new entrant into a market by a company with market dominance
      • Limitations on what resellers can do with the product purchased (only on low-end PCs)
      • Arbitrary discounts to some distributors over others
      • Agreements between different members of the supply chain to limit customer choice
      If the EU is at all consistent with the policies explained in my training today, MS should be forced to either sell low-cost XP to everyone, regardless of the hardware, or not sell XP at all. Who do I write in the EU to get an injunction?
      --

      TCP: Why the Internet is full of SYN.

  3. If they want to limit specs... by NeverVotedBush · · Score: 4, Insightful

    How will Microsoft compete? It is very common knowledge that Windows runs slower on any given system than Linux does. The low-end PCs are not beefy by any means. Linux will just feel snappier and also shouldn't need as much RAM for similar tasks.

    In the low end, it seems like all MS will be doing is highlighting their shortcomings.

    1. Re:If they want to limit specs... by symbolset · · Score: 4, Interesting

      How will Microsoft compete?

      They don't compete any more. They mandate. Their problem seems to be that OEMs are now following along by releasing systems under their mandate, but also building neat stuff outside the mandate. They can't do anything about the fact that their mandate subtracts value, making the new Linux gear immensely popular.

      --
      Help stamp out iliturcy.
  4. Of Course! by FurtiveGlancer · · Score: 5, Insightful

    Limiting the hardware specs ensures a healthy profit margin on the OS. Sounds like good business.

    We wouldn't want folks loading "WinXP lite" on good hardware. It might run really fast and have fewer conflicts, then they'll come to expect that from us in other products.

    --
    Invenio via vel creo
  5. In business school... by bsDaemon · · Score: 4, Insightful

    Do business schools teach their students that it is somehow a good idea to accept the terms of a "discount" from one supplier that require you to ship a POS product, when if you go with another supplier, it's absolutely free and you can sell whatever you want?

    It seems people were buying the EeePC just the way it was, with Linux and all, and using it just fine. I can't speak to it myself, as I have no use for such a device. However, what rationale is there for screwing up a perfectly good market just to make Microsoft happy, when they weren't a player to begin with?

  6. Two things leap out by TheRaven64 · · Score: 4, Insightful

    The first is that they limit screen size and also prevent you from having touch screens. Maybe it's just me, but the probability of any device I own having a touch screen goes up the smaller the screen size is, so this seems like they are shooting themselves in the foot.

    The other thing that really leaps out is this:

    The goal apparently is to limit the hardware capabilities of ULPCs so that they don't eat into the market for mainstream PCs I can think of a lot of other companies that have tried to limit the capabilities of products in one market segment so that they don't compete with those in another (IBM with the PC, SGI with low-end graphics hardware) but I can't think of a single company where the approach has resulted in anything other than them losing the market to a competitor. Maybe the MS monopoly is so strong that they can do this, but I doubt it somehow.
    --
    I am TheRaven on Soylent News
  7. XP Home only by symbolset · · Score: 4, Informative

    So if you're looking for thin & light notebooks to join your AD domain, you still need the Linux ones.

    They've just defined the features for the next big Linux boom: 12" touch screen, 100GB HDD, dual core. That was clever. Differentiate your product as the less capable one. Genius!

    These machines will never run Vista well. Let's keep that important knowledge in front of people. Intel expects to move 10 million Atom platforms in the first wave, and none will have Vista.

    --
    Help stamp out iliturcy.
  8. Re:They have to fight the camel's nose by ColdWetDog · · Score: 4, Informative

    Once Joe Random use linux on a low priced pc, why would Joe Random want to pay the Microsoft Tax ever again?

    Because Joe wants to run Calendar Creator or some such nonsense. He doesn't want to type "sudo apt-get install $whatever". He doesn't even want to use Synaptics Package manager. He wants the damn CD he bought in the bargain bin at WalMart to load and install.

    He wants IE and all the stupid toolbars.

    He doesn't want to think about this appliance he bought.

    And he especially doesn't want to go online and post a question to a forum. Even the warm and inviting Ubuntu forums. He just wants it to work. (Irony noted).

    --
    Faster! Faster! Faster would be better!
  9. Bah! by njcoder · · Score: 4, Informative

    I don't know about ultra low cost pc's but I've held on to an old laptop that's falling apart, had a failing drive and the replacement never quite fit so I just pulled it out and have been using a Damn Small Linux CD to boot so I can browse the web and even VNC into my main desktop.

    I also found this today. MilaX which claims to be like DSL but is based on OpenSolaris. But it doesn't look like that POS laptop will be able to run this.

    MS is planning on charging betweek $26-$32 bucks for Windows XP Home Edition for these machines. That's still a significant cost compared to the price of these machines. Especially the One Laptop Per Child based on reports of what they're planning on charging. But then again it seems their prototypes wound up being 2x as much as planned.

  10. Re:But are these devices that useful? by symbolset · · Score: 5, Informative

    Can someone convince me that these devices are [very] useful to the point of replacing the notebook?

    The point isn't really to replace the notebook. They'll do that too, though. A modern laptop is ridiculously overpowered for the purpose of running a well designed OS and office application. The idea is to make it cheap enough to not freak out about breaking it, to provide enough power to do your stuff but not so much that you have to be chained to a wall wart to accomplish anything that takes more than two hours.

    Can I for example, load OpenOffice.org on the Eee PC?

    Yes. And it runs just fine. And with Compiz the visual effects are flashier than Aero if you want them to be. And it will play HD video just fine. And it's got all the wireless features you would expect. And on and on. The screen and keyboard are a little small. The next generation may be better in this regard.

    --
    Help stamp out iliturcy.
  11. Way Cool; now is time to start company by WindBourne · · Score: 5, Interesting

    With MS trying hard to limit a company's hardware, that means that they will prevent sony and others from competing directly. So NOW is the time to start a hardware company. Do several platforms. The first being something that is XO style. Then go to next levels, which would be just above what MS is blocking. At that level, make it have touch screen. And of course, make it with some form of OSS (most likely Linux). This will allow you to hold down costs, and compete against the big boys

    --
    I prefer the "u" in honour as it seems to be missing these days.
  12. Re:They have to fight the camel's nose by SleepyHappyDoc · · Score: 4, Funny

    He's gonna have a hell of a time finding where to put the CD in on one of these low-cost laptops. I have yet to see one with an optical drive.

    --
    Stasis is death. Embrace change.
  13. Joe User WANTS to spend more money? by khasim · · Score: 5, Insightful

    So ... your mythical Windows user bought the cheapest box he could find ... and then wants to spend MORE money ... at WalMart ... on applications?

    When he could just download the app at home.

  14. Re:crippled hardware = bad performance by AndGodSed · · Score: 4, Insightful

    Yeah, the specs seem high enough.

    My real reaction to this is nausea. In effect this is what is happening:

    "Please please pleeeaaasse sell XP on your products! We'll even give it at a discount, but then you need to do what we say specs wise."

    C'mon, why the limits on the hardware specs? Is it to limit the choice of the customer?

    "Sorry sir, if you want a touch screen with that baby we'll need to limit you to using Vista. I know you are supposed to have a choice in the matter, but Microsoft policy dictates otherwise. Yeah, in effect they get to decide what you can run on what you buy. A linux alternative, uh sure - I think dell offers a similar spec device with Ubuntu on it... wait, where are you going!?"

    When will MS begin to put the interests of their customers first? If they can develop a custom version of Windows for mobile devices, surely they can develop a custom _modern_ version of Windows for low-end or micro laptops.

    If a linux community can do that, why can't they? Are they admitting that the open-source community which they deride so is capable of something they are not?

    Could it be that they cannot develop something like this? I say they definitely can, so the only other alternative is that they don't want to - hence they don't give a rats ass what the customer needs.

  15. Wow! by suso · · Score: 5, Funny

    It is an effort to stop Linux dominating this market

    Whoa, we're dominating a desktop market? That's awesome!

    Sometimes, when you turn around and look at the path that FLOSS has made over the past two decades, you just have to be proud. Way to go everyone!

  16. Fear and trembling in the PC industry by Animats · · Score: 5, Interesting

    The PC industry is terrified of low-cost laptops. They see $199 laptops in bubble packs at every WalMart, with a profit of about $1 per unit. Dell is in trouble; their custom-build business model is dying. So Microsoft's approach to driving up prices looks attractive.

    It won't last, but it might be good for a few years.

  17. Good ole joe by Mateo_LeFou · · Score: 5, Insightful

    I know Joe. He wants a lot of things. He wants our web design firm to make it so that whatever funky formatting he tries to paste in from MS Word will come out in the site exactly how it looks in Word.

    Joe has a problem: the cost of creating an online application that mirrors Word (and Excel and friends) exactly is in the several-millions, and is furthermore legally proscribed by patents anyway.

    We can hook Joe up with some great RTEs and OOo templates that work for a couple thousand dollars, but Joe wants the illegal multimillion dollar project for $2,000.

    I'm not interested in trying to accomodate Joe anymore.

    --
    My turnips listen for the soft cry of your love
  18. Re:E.g. EeePC by mabhatter654 · · Score: 5, Insightful

    bingo, that's why everybody is squealing. Asus cut the harware specs to cover the windows costs. To the average user, it will look like two things cost the same one "broken" without Windows but a few GB of ram (who cares about 8GB when there's 500B drives for cheap?) Stores simply won't sell without windows, and I'm sure MS has advertising agreements to sell the Windows stickers with big box stores so the Linux version won't see shelf space.

    On another note, a lot of good the "patent" agreement did Xandros here. They got "blessing" to sell their linux with windows "compatible" functions only to have Microsoft come and eat their lunch when they actually make sales.

  19. Am I the only one to feel... by wertigon · · Score: 5, Interesting

    It's time for manufacturers to tell Microsoft "Look, we do this on our terms. If you want to cooperate on our terms, fine. If not, then take your fucking ball and go home!"

    Seriously, there's a great alternative out there. Microsoft is, for the first time in a very long time, in a position not as the big bully, but as the kid trying to get popular. Let's see how they manage to cope with this...

    --
    systemd is not an init system. It's a GNU replacement.
  20. Everything to do with Linux by canuck57 · · Score: 5, Insightful

    Guess what the REAL reason MS is going into the low cost PC market? CONSUMER DEMAND.

    No, the real reason is to try to stem the numbers of people getting exposure to Linux and finding out that it is quite capable of doing the job for a fraction of the Micro$oft cost.

    And to add to it, since Vista is too fat to fit they are going to be using the soon to be discontinued XP base to do it. Go figure.

  21. Breaking the rules by symbolset · · Score: 5, Interesting

    The rule was, never release a new platform that won't run the latest version of Microsoft's products. ASUS broke the rule and can't make their new product fast enough. Their new deal with Microsoft just highlights that if you break the rules and succeed, you get new rules.

    Maybe ASUS will take the money and run, Maybe they'll deprecate their Linux offerings and move millions of XP Home eee machines and be happy. I don't think so, but that could happen.

    It doesn't matter. If ASUS won't break the rules somebody else on their way up will. This whole scene will play out over and over. Marketing deals cannot halt innovation because it's the innovators that bring the interesting new products that catch our attention and gain the most enthusiastic early adopters.

    --
    Help stamp out iliturcy.
    1. Re:Breaking the rules by jmorris42 · · Score: 4, Insightful

      > somebody else on their way up will.

      Oh course. It is always thus. All of the established players were fearing where this would end up. Now they think they head this off at the pass and declare that what everyone really wanted was tiny $500 machines instead of $500 machines with 14" screens and 120GB hard drives.

      But there are plenty of Chinese manufacturers without a vested interest in the current product catagories and retail outlets who don't have a horse in the computer races. Imagine these:

      1. Take 1 15" LCD panel, strap $50 worth of computer to the VESA mount on the back. Give it enough smarts to get itself onto most broadband connections via wired or wireless. Sell em through Big Lots or some such deep discounter. Or imagine an LCD TV/DVD player with a brain upgrade, a WiFi antenna and a USB keyboard/mouse in the box.

      2. Grab an ARM system on chip, a smallish LCD and whip up a $120-150 portable. Forget making it especially small or light, just go for CHEAP. Again, push em through stores that don't HAVE a computer department to worry about cannibalizing.

      How about this for an idea for a totally new form factor. Imagine a clipboard form factor. Screen at the top, keyboard at the bottom, a flat sheet of lipo battery on the whole bottom. NO hinge, NO bother. CHEEP. Add a vinyl folding cover if ya just wanna pay lip service to protecting the screen or want to make it a 'notebook'.... heck, add a place for paper and go for the 'portfolio with a computer embedded' form factor. :)

      At any rate, Moore's Law will keep driving down the cost of a system capable of running Firefox. Eventually we have to get low enough Microsoft won't be able to stay in this game of limbo and then the game changes.

      --
      Democrat delenda est
  22. Parent is right by LingNoi · · Score: 4, Informative

    but Teh Lunix isn't even a player in the OS market.
    Well you're right but offtopic, Lunix was written of the c64. RTFA you moron.
  23. All about the UMPC by fuzzyfuzzyfungus · · Score: 4, Insightful

    These hardware restrictions, particularly the ban on touchscreens, lead me to suspect that what MS is really trying to protect, without totally giving the new tiny-cheap-laptop field to Linux, is the UMPC. Remember, "UMPC" doesn't just mean "little laptop". UMPCs were supposed to be a bold new category, remember all the "Origami" hype? Essentially, the vision of small, portable computing that MS specced out was that of fairly powerful devices, with touch screens required and keyboards optional, running straight Windows Vista and accompanying software, with a touch screen interface slapped on top. Unfortunately for them, the "fairly powerful" requirement made UMPCs surprisingly expensive and made their battery life suck pitifully, without actually making Vista run all that well.

    The first few versions utterly sucking is something that MS is used to, so there was reason to believe that they would work this one out as well. Costs would gradually go down, chips would get less power hungry, and so on, and the UMPC would eventually worm its way in. Then the eeePC and friends show up(arguably, the tradition of tiny laptops goes back a long way, various PC makers have been pumping them out for years, although in small quantities and at high costs, and the OLPC project can be said to have spurred cheap, small laptops; but the eeePC was the first to hit the western mass market). Compared to the UMPC, the eeePC and similar are pretty boring tech. Just normal laptops; but smaller. Thing is, this is one of those situations where modest ambitions are a real blessing. UMPC goals required hardware that was either unavailable or too expensive. eeePC goals required nothing more than the willingness to slap together parts that are already cheap and common. Even if the eeePC and its ilk were all running XP from the get-go, they would still be a kick in the teeth for the UMPC. I doubt that the category is dead; but the road to acceptance, particularly for consumer level applications, became much steeper and much rockier with the advent of the eeePC and similar. The fact that Linux is showing up for the party is adding insult to injury.

    I'm thinking that the hardware restrictions serve a few purposes:
    Keep a clear distinction between UMPC(now positioned as "premium") and the teeny laptop("budget"). Teeny laptops kill UMPCs at being cheap; but MS hopes, at least, to preserve certain features as UMPC only.
    Keep Linux from creeping upward. Obviously, MS doesn't like any machines not running Windows; but they would rather preserve a "linux=cheap gadget/Windows=real computer" distinction than not. By not allowing high end features to creep in(or, at least, forcing OEMs to make more hardware variants if they do), MS can keep eee type boxes from gradually shading into full computers or "premium" small computers.