Windows XP sales extended through 2010 for ultra-low-cost PCs

Microsoft confirmed Thursday that it will extend the sales of Windows XP Home
to OEMs beyond the current deadline of June 30, 2008, to accommodate a new class
of ultra-low-cost PCs (ULCPCs) that are just beginning to pepper the market.

Windows XP Home will be available for OEMs to install on ULCPCs either until
June 30, 2010, or one year after the availability of the next client version
of Windows, code-named Windows 7 -- whichever date comes later. The IDG News
Service previously reported that Microsoft would extend XP's life for these
machines.

Though Microsoft has not yet revealed when it expects Windows 7 to be released,
it's safe to say the OS either will be available before June 30, 2010, or Microsoft
at least will have an idea by then of when it will be released.

"That is not an unreasonable presumption to make," said Kevin Kutz,
director of Windows Client for Microsoft. The company has said it will release
Windows 7 by the end of 2009 or early 2010, but has been vague about specific
details or an exact release date.

Kutz stopped short of saying Microsoft is willing to extend the availability
of a seven-year-old OS because it doesn't want to concede the ULCPC market to
Linux, which many feel is the reason for the move. Instead, he said it's customers
and partners who are driving the extension. "The feedback we've gotten
from customers and partners is they want Windows on those devices," Kutz
said.

At the same time he acknowledged that Microsoft, too, wants to see Windows
on ULCPCs, and wants "to provide the best possible Windows experience for
the device."

Still, if Microsoft is willing to allow OEMs to put a version of Windows on
devices up to nine years past its release date when there will be not just one
but two XP successors on the market, it's apparent the company recognizes a
threat from Linux in that market. Linux is the OS running the current poster
child for the low-cost laptop -- Asustek Computer's US$249 Eee PC, which was
released in October and runs the Xandros distribution of Linux.

Linux also was supposed to be the OS for a forthcoming line of ULCPCs based
on new Intel Atom processors that are due out later this year, laptops Intel
is calling Mobile Internet Devices (MIDs). In the past, Intel had said the MIDs
would run Linux and established an effort, called Moblin.org,
to develop a version of the open-source software for the devices.

However, Intel's Gary Willihnganz, director of marketing for its Ultra Mobility
Group, said this week that both Windows XP and Vista also will run on the Atom-based
MIDs in addition to Linux. He even suggested that the devices will be designed
with support for Vista in mind, by saying the new platform will "be enabled"
for both XP and Vista.

Since Intel's MIDs are not expected to be available until after XP's current
June 30, 2008 deadline, this likely inspired Microsoft to change its XP availability
policy. On the ULCPCs that are currently available for the market, Vista is
not an option because of its memory and hard-drive requirements. Kutz said Thursday
that Microsoft has no plans to change Vista to make it more suitable for ULCPCs,
and hinted that forthcoming ULCPCs will evolve to the point that they can run
Vista.

"It depends on what an ULCPC becomes over time," he said. "Right
now we're enabling as much flexibility and choice as possible."