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Microsoft is attempting to counter the success of of Linux in ultra low-cost pc’s (such as ASUS’ Eee PC) by lowering the price of Windows XP Home and limiting it to certain hardware standards that would prevent the ULPCs from competing with higher-end machines that offer Vista.

Microsoft will offer XP at prices in the thirty dollar range to counter the rise of open-source Linux in small, low-end PCs, but only if those machines feature screens less than 10.2 inches, hard drives of less than 80GB, 1G of RAM or less, and a processor speed of less than 1 Ghz, although certain chips like Intel’s Atom will be allowed.

The hope for Microsoft is that ULPC makers, confronted with low-cost Windows, will choose the operating system more people are familiar with over Linux, yet still keep a clear divide between the small machines and higher-end Vista machines.

ASUS’ next generation Eee PC is launching in the US on May 12th, with versions features XP and Linux. While it boasts a bigger screen and reports better performance (with one gig of RAM instead of 512), it will still contain Intel’s Celeron chip, not the upcoming Atom chip that many were hoping for. However, the Atom is due out in June, so updated Eee PCs may be available then for those willing to wait.

Thanks to PC World and Agam Shah at IDG News Service for the story.

Technorati Tags: ulpcs, microsoft, linux, eee pc