Population Statistic: Read. React. Repeat.
Sunday, November 12, 2021

So why, in this kinder and gentler post-antitrust era for Microsoft, is it still near-impossible to buy a decently-powered out-of-the-box Linux computer? Business 2.0’s Owen Thomas breaks down the industry economics:

To settle the government’s massive antitrust lawsuit, Microsoft agreed to charge all PC makers a uniform royalty, based on the number of Window licenses they buy. The more Windows licenses a PC maker buys, the cheaper the cost per unit.

While Microsoft can’t punish companies for selling rival operating systems, machines with anything but Windows installed don’t help PC makers meet the quotas necessary to pay Microsoft lower rates…

In a nutshell, switching to a rival OS system will hurt more than help the bottom lines of PC makers. The straightforward economic scheme that regulators set up to keep Microsoft in check is essentially keeping the PC industry in the Windows fold - just as Redmond’s brass-knuckle tactics once did.

This explains why Walmart.com sells a Linux PC made by Microtel Computer Systems, an obscure PC maker few people have heard of. The companies that are brave enough to sell Linux PCs are the ones that aren’t unloading large volumes of Windows PCs to begin with. And because they’re small, they can’t negotiate volume-based price discounts with component suppliers like Intel. That’s why Microtel’s Linux PC is less powerful than a Windows machine at the same price.

Mass-volume production has made that $70 per-unit Windows license a negligible concern. In this ironic development, Microsoft has locked up the low-cost end of the computing market, effectively making the use of no-cost Linux the pricier option.

That being the case, the solution for Linux proponents is to switch gears, promotionally:

There’s clearly an opportunity here for Linux suppliers. Seizing it, however, is going to require a whole new marketing mindset. They should forget touting Linux as a cheaper alternative to Windows. Instead, pitch Linux as a luxury product whose stability, versatility, and virus-resistant technology deserve a premium price.

That is the approach Apple’s used, to modest niche success. It will require having the most rabid penguin-pushers abandon the idea that people should buy their machines and then download their own do-it-yourself Linux installation, because that simply won’t work for the consumer market.

- Costa Tsiokos, Sun 11/12/2021 07:15:55 PM
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