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Microsoft drops price on Windows CE

The company lowers the price on Windows CE.Net to encourage developers to squeeze the operating system into consumer electronics devices and industrial equipment.

NEW ORLEANS--Microsoft has lowered the price on Windows CE.Net to encourage developers to squeeze the operating system into consumer electronics devices and industrial equipment.

The licensing fee for Windows CE.Net 4.2 will now start at $3 per device, down from around $15. The $3 fee applies to only the core version of the OS; Microsoft will also sell more elaborate versions that come complete with complex interfaces or Messenger.

"It is still quite a bit less than it has been historically," Microsoft Chairman Bill Gates said Tuesday at the Windows Hardware Engineering Conference (WinHEC) here. The Redmond, Wash.-based software maker also came out with a free version for noncommercial products.

Still, it's a price cut, and Microsoft and price cuts aren't exactly synonymous. Typically, the company has chosen to add features to it software and keep the price level year after year.

The embedded market, however, is far different from the PC market; the devices often cost far less. Microsoft, for instance, is trying to fit the OS into wristwatches and other household items in its Smart Personal Objects program. Hardware developers also have a wide variety of software from which to pick: from Linux-based operating systems to proprietary real-time operating systems.

Among other products, Windows CE.Net is used in so-called smart displays, portable handheld screens that can send and receive e-mail and scroll through Web content when used in conjunction with a PC.

So far, smart displays have been overshadowed by Tablet PCs, which look similar but are fully functioning PCs. The relatively high prices of smart displays, which can cost $1,000 or more, have also hurt sales, many analysts have said. Prices, however, are expected to come down. A new round of displays will likely come out toward the end of the year with a new Smart Display version of CE.Net.

"The next generation to come (is) going to drive different form factors, (higher) performance levels and lower price points," said Mike DeNeffe, director of marketing at Transmeta, which this week jumped into the smart displays market. "The smart displays on the market today are pretty high priced. The goal is to bring the price down well below $1,000."