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December 20, 2004

Wal-Mart: wired and Linspired

A new laptop with an operating system that is compatible with, though much cheaper than, laptops running the Microsoft Office system has been launched by Wal-Mart and Linspire. The low-cost laptop opens up the market to lower-income consumers, though is unlikely to convert most from tried and trusted Microsoft software.

By CBR Staff Writer

Wal-Mart and Linspire have launched the first US laptop for under $500.

Wal-Mart is the world’s largest retailer, with over 5,000 stores in ten different countries. A discount retailer, the company works on an Every Day Low Price philosophy, which is achieved through conscientious expense control and partnerships with producers, such as Linspire.

Linspire’s self named core product is a Linux-based operating system designed specifically for desktop and laptop computers in competition with Microsoft Office. Linspire undercuts Microsoft prices, yet due to Microsoft’s near monopoly on office software, has previously lacked the publicity and distribution network to compete effectively. A new partnership with Wal-Mart, however, has enabled Linspire to manufacture a laptop at an even greater cost reduction, while improving its availability across the US. The headline price has also boosted publicity of the product, which should help sales.

The laptop is being marketed as an affordable, easy-to-use home machine and should appeal to lower-income households, students and people who would previously not have considered a laptop. To broaden its appeal, the company has also suggested that it is perfect for use as a second or third home machine. As already experienced with televisions, the surge in home computer ownership is likely to result in a growth in the number of households owning more than one computer.

It seems that Microsoft’s monopoly is increasingly under threat, as other firms enter the market, such as Evermore Software, a Chinese software startup. Evermore offers a unique and more user-friendly alternative to Microsoft Office by combining the word processing, spreadsheet and graphics components of a conventional Office suite into one application.

However, despite the convenience of new applications and the compatibility of new software to Microsoft Office, most computer users are Microsoft stalwarts who may be unwilling to adapt to new applications. Lower prices and increased availability will start to diminish the importance of these concerns, though until other software packages are accepted, in offices, as well as homes, it is unlikely that Microsoft’s power will be dented in the short term.

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