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PC Makers to Offer Full Windows Version in Europe
Fri Apr 1, 2005 06:18 PM ET
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By Reed Stevenson

SEATTLE (Reuters) - The world's two largest PC makers said on Friday that they expect mostly to sell machines with full version of Windows in Europe despite a European antitrust order forcing Microsoft Corp. (MSFT.O: Quote, Profile, Research) to offer a stripped-down version of its flagship operating system.

After weeks of legal wrangling, the world's largest software maker agreed earlier this week to sell a version of its operating system called "Windows XP Home Edition N" without software for playing music and videos. Microsoft's Windows runs on more than 9 out 10 PCs in the world.

The European Union's top regulatory body ruled last year that Microsoft had abused its monopoly status and ordered the Redmond, Washington-based company to pay a $650 million fine and offer an alternate version of Windows in order to encourage more competition from audiovisual software programs from RealNetworks Inc. (RNWK.O: Quote, Profile, Research) and Apple Computer Inc. (AAPL.O: Quote, Profile, Research) .

But Dell Inc. (DELL.O: Quote, Profile, Research) , the world's largest PC maker, said on Friday that it had no plans to sell PCs in Europe without Microsoft's audiovisual software, called Windows Media Player.

"The current offering (version of Windows) satisfies our requirements," said Venancio Figueroa, a spokesman of Dell, based in Austin, Texas. "We'll continue to monitor the market to see what demand is like."

Palo Alto, California-based Hewlett-Packard Co's (HPQ.N: Quote, Profile, Research) vice president for Europe, Ingo Juraske, told The Wall Street Journal Europe that the world's No. 2 PC maker will offer both versions of Windows in Europe, but doesn't expect many customers to opt for "Windows XP Home Edition N."

The vast majority of Windows sales are made when hardware makers sell a PC running the operating system, rather than directly from retail store shelves.

"It goes back to the market reality," said Pacific Crest Securities analyst Brendan Barnicle.

Barnicle said the larger PC makers would have a hard time selling a version of Windows without Windows Media Player, since it is already the most widely-used proprietary format for recording, playing and exchanging audiovisual content.

Microsoft had no comment on Dell and HP's plans, saying that it doesn't get involved in such decisions.

"Decisions on if and when they sell (Windows XP Home Edition N) is entirely up to each of the computer manufacturers," said Microsoft spokesman Jim Desler.    Continued ...



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