Microsoft struck at the heart of a major competitor in a new line of high-tech products estimated to bring NT$204.8 billion (US$6.4 billion) by 2005 to Taiwanese manufacturers, promising low prices and access to the software's source code -- the top two selling points of Linux.
Microsft attracted over 220 Taiwan-based manufacturers to a conference in Taipei yesterday to introduce its Windows CE 3.0 operating system meant for Internet appliances (IAs). So diverse is the new IA category of products, it includes everything from Web pads to household appliances -- in a future where all gadgets are hooked to the Internet.
This is not to say people will read e-mail from a screen on their refrigerator, but that the information available on the Net could be of use to a smarter appliance. For example, an Internet-connected refrigerator might scan food items placed inside and warn families of spoilage or when supplies are dwindling. In addition it may even keep track of favorite foods and search for coupons or low prices posted on the Net, sending a shopping list and suggested grocers by e-mail to its owner.
This kind of functionality requires microchips and software, and Microsoft aims to put the latest version of its operating system into these appliances. Its top competitor in Taiwan -- Linux -- however, costs almost nothing and can be freely manipulated by companies who want to place it in a wide range of products.
Although Microsoft Marketing Director Keith White said that new measures have lowered prices -- US$15 per license with prices dropping as volume grows -- and 130 lines of source code most often requested by Taiwanese customers, Microsoft "seeks only to fulfill customer needs, pulverizing the strengths of the competition."
All the source code -- building blocks of software -- for Linux is offered free over the Internet to a growing community of software developers who know how to use it. It has won a large following among Taiwanese manufacturers.
"Taiwanese companies have found their competitive edge in seeking the least expensive way to do anything, whether it's manufacturing computer products or developing operating systems," said Mike Lin (林智清), spokesman for the Taipei Computer Association.
The computer association, best known for putting on the annual Computex trade show, helped launch the Taiwan Linux Consortium (促進會) just a few weeks ago -- a group whose membership has already grown to 60 companies, including heavyweights VIA Technologies (威盛) and Micro-Star International (微星). Lin expects the figure to reach 100 by year's end.
"Most manufacturers here already have a department for software development," Lin said. "There is no reason for them to buy Microsoft [operating systems] when they can freely use Linux."
Microsoft's White, however, pointed out the strong research and promotional abilities of a large company and a developmental time frame for new products as two major advantages that Microsoft holds over Linux.
"Microsoft provides a clear time frame," said White, "people want answers as to when Bluetooth or other functionality will be added to an operating system." Manufacturers prefer this kind of road map as opposed to waiting for "some [Linux] programmer to decide to do it at 3am in the morning when he's not doing his real job."
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