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Microsoft Corp. on Thursday said that it would extend the lifespan of Windows XP Home operating system (OS) for two more years. The extension of availability will only be effective for so-called ultra-low-cost personal computers, or ULCPCs, whereas mainstream computers will have to be based on Microsoft Windows Vista OS.

Windows XP Home for ULCPCs will be available until the later of June 30, 2010, or one year after general availability of the next version of Windows. Modern entry-level computers, or ULCPCs, come with single-core low-speed microprocessor, 512MB or even less random access memory (RAM), up 2GB – 12GB of storage space, very basic graphics core and low-resolution display. Meanwhile, Microsoft’s latest OS, Windows Vista, needs higher-speed microprocessor, better dual-core chip, 1GB or more memory, 15GB – 30GB of storage for OS alone as well as higher resolution screen and DirectX 9-compatible graphics sub-system. One of the problems that Microsoft recently faced was that many customers may not need advantages of Vista, but are satisfied with much less capabilities.

“ULCPCs are a new and growing class of mobile computers designed for first-time PC buyers and customers interested in complementing their primary Windows-based PCs with companion devices with limited hardware capabilities. […] While originally intended for students and other first-time PC customers in emerging markets, we’re now seeing interest in these affordable devices in developed countries as well,” said Michael Dix, general manager of Windows client product management.

At present entry-level systems, such as Asustek Computer’s Asus Eee PC, come equipped with Linux operating systems tailored specifically for the device, which is a threat for Microsoft. However, since much more consumers are familiar with Windows, there is a huge market potential for Microsoft OS-based low-cost systems.

“Customers and partners have made it clear to us that Windows is the preferred operating system for ULCPC buyers, just as it is for mainstream PC users.  That’s why we are extending direct OEM sales of Windows XP Home for ULCPCs so that they can preinstall Windows on these devices through the later of June 30, 2010 or one year after the general availability of the next version of the Windows operating system,” Mr. Dix added.

The price of Microsoft Windows XP Home for ULCPCs was not announced. Usually OEM Home version costs $69 - $79 in the U.S., but large computer makers get the operating systems with substantial discounts.

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