Microsoft CEP Steve Ballmer has clarified what other company executives have been avoiding. If you wish to buy a netbook with what he describes as:

‘it’s got to have a super-small screen, which means it probably has a super-small keyboard, and it has to have a certain processor and blah, blah, blah, blah, blah.”

you will be getting Microsoft Windows 7 Starter edition. The starter pack is not for sale and is limited to OEM systems. He goes on to state that in order to get Windows 7 Home Premium and above, you will need a computer with more horsepower.

In the article it also states the following observation:

“They’re trying to force people into higher-end SKUs,” said Allan Krans, an analyst with Technology Business Research. “Selling XP at a low price to OEMs hurt them financially, and they’re trying to figure out a way to stem that.”

Last month, Microsoft said revenues for the Windows client division were down 29% year over year for the company’s fiscal fourth quarter, which ended June 30. Microsoft blamed the fall-off on the increased sales of netbooks and a global slow-down of PC purchases.

This is going to be a fine balancing act for Microsoft. They face increased competition from Linux which works fine on netbooks as well as the upcoming Google Chrome operating system. Netbook sales have increased dramatically leaving Microsoft in a tough position.

So what do you think? If you purchase a netbook will you be satisfied with Windows 7 Starter edition? Let us know.

Comments welcome.