When Monopolists Meet, You Lose

Looks like Microsoft and Intel have conspired agreed on what a netbook is.

The only problem I have with this is that users have no say; I may be an idealist, but I would have opted for consumers to define the standard by what they buy, not by what they’re offered by the “Big Two”. Seems to me offerings by the “Big Three” from Detroit have not worked out all that well – not a business model to emulate. The constraining factor is the availability of Windows 7 Starter Edition – this is the less costly OS of the Windows 7 line that is slated to take XP’s place in the netbook world.

Based on what’s being discussed between the “Big Two”, looks like netbooks will have the following characteristics:

• Screen size of 10.2″ or less
• Single core CPU less than 2 GHz
• CPU not more than 15 watts thermal design
• Windows 7 Starter Edition without multi-touch, thumbnail previews on the taskbar, ability to initiate Home Groups and no ability to customize the desktop; unclear whether this version will be limited the three apps
• 1 GB RAM
• HD not more than 250 GB or SSD not more than 64 GB

Of course all this is based on Windows 7 being the OS of choice. Although Linux or Android could be used instead, the overriding choice among consumers is for a Windows OS.

Seems like this all started because Intel is concerned that netbooks are cannibalizing notebooks. As such, Intel is selling a ton of low-priced Atom CPUs to the detriment of the high-priced spread. Rumor has it that Intel approached Microsoft about setting some OS limits that were more to Intel’s liking (and balance sheet) and for whatever reasons (or quid pro quo), Microsoft acquiesced.

It’s a bit of a mystery to me why Intel, with a bunch of anti-trust suites going against it and more in the hopper, would engage in what might be called restraint of trade tactics. I am further mystified as to why Microsoft would play ball in an arena where the end-game smells like this, especially when it too faces a LOT of scrutiny from the anti-trust anti-monopoly folks.

I wonder if my good friends in Taiwan have enough leverage to rally the troops against what seems to me an incredibly visible manifestation of market manipulation. At one time they rose up against Intel’s force play on RAMBUS – will history repeat?