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6/29/2004
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Gates: Microsoft To Explore Cheap Software With Asian Governments

He said Microsoft will hold talks to offer cheaper versions of Windows designed to bring computer skills to millions of poor people.

PUTRAJAYA, Malaysia (AP) -- Bill Gates said Tuesday that Microsoft will hold talks with Asian governments to offer tailored, cheaper versions of its Windows operating system geared toward bringing computer skills to millions of poorer people.

The discussions will grow out of a project Microsoft announced last week to offer a version of Windows, dubbed Windows XP Starter Edition, in Malaysia and Thailand under government-sponsored programs to provide more affordable personal computers to new users.

"We will talk with other governments about whether they have a program to get very, very low-cost computers to their citizens," Gates told a news conference during a visit to this Southeast Asian country.

"When they have a program like that, we will talk to them about which of the versions of Windows would make sense there," Gates said. "We've shown a lot of flexibility about tuning the versions to meet any government program."

Gates would not specify any country Microsoft is targeting in such talks. He was asked about the potential for such projects in China and India--the population jackpots in Asia where computer use is exploding.

Gates, who sits on a panel advising the Malaysian government on technology policies, held talks with Prime Minister Abdullah Ahmad Badawi for about 45 minutes on improving access for technology to Malaysians.

The company and Malaysian officials signed a memorandum of understanding for Microsoft to invest 10 million ringgit ($2.62 million) to train teachers and improve information technology in 10,000 schools over five years.

The software giant faces increasing competition in developing countries from cheaper rivals--such as those based on "open source" Linux technology--plus the continual challenge from product piracy.

Providing cheaper legitimate versions of Windows could allow Microsoft to gain some share in the lower end of the market, which is fertile ground for pirates.

But many Asian consumers will continue to use pirated software, which would still cost less, said Chin Jun Fwu, a Kuala Lumpur-based analyst with technology research group IDC Asia-Pacific. "From the consumer's point of view, it's always the price that matters," Chin said.

Malaysia and Thailand are logical choices for Microsoft's new project because both countries have relatively high software piracy rates--a problem that also afflicts several other Asian nations such as China, India, Vietnam, Indonesia, and the Philippines, Chin said.

A legitimate copy of Windows XP installed on personal computer in Malaysia currently costs from 320 ringgit ($84) to 515 ringgit ($135), retailers say. A pirated copy can cost as little as 5 ringgit ($1.40).

The scaled-down versions of Windows that Microsoft is offering have many typical Windows features. Under a program already under way to bring computers to rural households, a personal computer installed with a Malay-language version of the XP Home edition sells for 1,147 ringgit ($300).

Gates said that making Windows "very, very inexpensive" would benefit people who want to train on Microsoft software and eventually land higher-paying employment as software-related jobs are created in Asia.

Abdullah said he and Gates discussed Malaysia's aim of providing more people with access to computers and cultivating homegrown specialists to create new software and technology for international markets.

Gates has already visited Australia and heads next to China.

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