A tiny yet important crack has opened, with little notice, in the great Windows monopoly that surrounds personal computing.

Microsoft for the first time is lowering the price that manufacturers pay for the Windows operating system.

It's happening with a new version of the OS called Windows XP Starter Edition that's only being sold on the other side of the world in languages other than English.

But this crack could quickly widen. I expect more and more nations to demand their own low-cost version of Windows. I can even imagine a day, not too distant, when an economic colossus bigger than any nation -- Wal-Mart -- demands Starter Edition for PCs on sale in the United States.

One characteristic of a monopoly is the ability to sell the identical product at a fixed price in all markets. Somewhat like the old joke attributed to Henry Ford: "You can have a Model T in any color you want, as long as it's black."

Windows XP Home Edition, the standard consumer version of the OS, costs just under $99 when purchased individually for a PC running an older version of Windows.

PC makers pay less, although the exact amount is a closely guarded secret. The best guess by outside analysts is $50 to $75. After including overhead, Windows probably adds about $100 to the retail cost of a new computer.
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Source : SiliconValley.com