The PC market needs to change to maintain healthy growth, an industry analyst has warned.
Martin Reynolds, senior analyst with researcher Dataquest said major change is required in a number of areas across the industry to attract users in emerging economies, like China.
Reynolds said further drops in prices and eventually a $300 PC, would be required to enable users in these countries to afford to buy a computer.
He said traditional PC vendors are currently too expensive to target these countries and as a result smaller companies could steal market share.
"We have also noticed a re emergence of the clone manufacturers or 'white box' companies. These manufacturers have lower costs, no marketing overheads and business is purely relationship based. The biggest steal is the low price," he said.
Reynolds added that with such cheap PCs, users would also require cheaper operating systems. "We need the $10 OS for increased penetration into emerging economies," he said.
"The Department of Justice is not the biggest threat to Microsoft, its stock price is. It cannot maintain its recent growth and if it stops growing, people will start leaving. Microsoft is no longer able to grow by increased unit shipment and is starting to increase its average selling prices to compensate."
Reynolds suggested several alternatives to Windows: "There's Linux, it's open and we like this, the BeOS which is good but has no applications, Epoc could be good, but there is a wildcard - Solaris. A consumer version of Solaris could earn Sun money from individual licenses."
He warned that one of the biggest issues for Microsoft, should PC adoption take off in emerging economies, would be software piracy.
"We expect Microsoft to introduce some sort of hardware/software lock where users gain authorisation for their OS from the Internet. This is especially essential in countries like China where piracy is a major problem."
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