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PC makers shun Windows XP reduced

Many European vendors won't offer a new version of Windows without Media Player

The European Commission is battling to ensure that a new, "reduced" version of Microsoft's Windows operating system will appear palatable to customers, but its efforts may be in vain: Most of Europe's biggest PC makers say they don't plan to offer the software anyway.

In the latest twist to the ongoing antitrust wrangle, the Commission on Monday was said to be concerned about certain messages that appear when users install the new Windows release, which comes without Microsoft's Windows Media Player software.

The dialogue boxes apparently warn users that they won't be able to access certain websites or view some types of content with the operating system.

The Commission is keen to prevent Microsoft from doing anything that would make customers less willing to buy the new Windows release, which the Commission hopes will create a more level playing field in the media player market. The Commission has already rejected Microsoft's suggestion that it call the software "Reduced Media Edition", Microsoft confirmed last week.

The two sides are in talks over the outstanding issues and expect to resolve them in the coming weeks, a Commission spokesperson says. If the Commission is not satisfied that Microsoft is complying fully with its ruling it has the option to impose penalty payments equal to 5 percent of Microsoft's daily turnover, the spokesperson says.

"They must not make the unbundled version of Windows any less attractive [than the standard version]," he says.

Microsoft was ordered to sell a version of Windows without its media player last year as part of the Commission's efforts to curb the software maker's abuse of its monopoly power.

By effectively forcing PC makers to include Windows Media Player with every computer they sold, Microsoft gained an unfair advantage over rivals such as RealNetworks and Apple, the Commission said.

However, Dell, HP and Fujitsu Siemens, which are three of the top four PC makers in Europe, all have no current plans to offer the new version of Windows, representatives from those companies say. Acer, which rounds out the top four in Europe, did not return calls seeking comment, while IBM says it wants to test the software and has yet to make a decision.

Dell and Fujitsu Siemens both cite the additional effort it would take for them to offer a new operating system and say that, in any case, they do not think customers will be interested in buying it.

"It simplifies our ordering process to not have to distinguish between versions of the OS we load and ship with our systems," a spokesperson for Dell says. "We will continue to monitor demand and could look at this again later if customer preference changes."

Fujitsu Siemens notes that the operating system will be priced the same as the full version of Windows. "For the time being, Fujitsu Siemens Computers will not offer the Reduced Media Version of Microsoft Windows due to less functionality without any cost saving effects but increased complexity and efforts," a spokesperson for the company says.

Some IT distributors, meanwhile, say they will stock the software but expect little demand for it from customers.

"If both versions are offered at the same price then I'm sure customers will go with the full version," says Christian Svard, managing director of IT distributor GNT Sweden.

Actebis Holding, which distributes Windows software to resellers in 12 European markets, calls the new Windows release "media hype".

Toshiba is perhaps the only big PC vendor in Europe that said it plans to offer the OS.

Industry watchers aren't surprised by the lack of support, which appears to undermine the Commission's efforts to bring greater equality to the media player market.

But its efforts may yet produce results, says Philip Carnelley, research director at UK analyst company Ovum. Offering Windows without Media Player may not benefit RealNetworks, but it will force Microsoft to think twice in the future about making other applications a standard part of its operating system, he says.

"I've always thought that the impact of the [Commission's] decision would be on Microsoft's future freedom to add what it likes to Windows," Carnelley says.

"Microsoft has been giving away free copies of its antivirus software while it's in beta," he continues. "I'm sure they'd just like to throw it into future editions of Windows like Longhorn. But now Microsoft is having to look over its shoulder and question what the EC will allow it to bundle with Windows and what it won't."

Simon Taylor, John Blau, Peter Sayer, Laura Rohde, and Scarlet Pruitt of the IDG News Service contributed to this report.


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