Yes the ridiculous acronym of ULCPC (Ultra Low Cost PC) which mostly means netbook, was a term defined by Microsoft not too long ago. They said that devices which qualified as ULCPCs would be able to get discounts on XP installations, making OEMs more likely to make their hardware fit Microsoft’s ULCPC criteria so that they could receive the XP discount. One theory explaining the XP discount move and associated ULCPC definition is to keep a Windows OS on emerging netbooks, and of course prevent Linux environments from ruling the space. The hardware limitations are possibly meant to make sure that netbooks don’t encroach on Vista’s regular home computing space. Otherwise you would have OEMs offering XP as an install option on new desktop purchases and other hardware while MS is trying to convert everything to XP.

From InfoWorld on XP pricing: “The documents show that for developed markets, Microsoft charges $32 to install XP Home Edition on standard netbooks, and $47 for netbooks with the larger screens. PC makers who meet certain requirements in Microsoft’s Market Development Agreement can get a discount of as much as $10 on those prices, the documents show.”

Many people however, myself included, were a bit upset with Microsoft for making a pretty stupid definition of the ULPCP. Microsoft said that units over 10.2″ screen size, 80GB HDD, and those with touchscreens could not qualify as a ULCPC and thus would not receive the XP discount. Maybe this is why nearly every netbook has an 8.9″-10″ screen and doesn’t have touch input?

Whatever the case, it looks like Microsoft is easing up the criteria it laid down previously. Now MS is saying that a ULCPC can include a screen up to 14.1″, and it can be touchscreen. Additionally, the 80GB HDD cap has been raised to 160GB. This is nice but there are still more restrictive limitations in place such as the CPU which MS says can only have one core and run at no higher than 1GHz, or how about the 1GB of RAM cap? If MS didn’t have some sort of super strategy behind all of this I think that defining something as a ULCPC just by its price would work fine and would not be in the way of low cost computers becoming more main stream. I wonder what MS would think about a computer running a Core Solo CPU, which is actually a Core Duo with only one functioning core…

[InfoWorld via GBM]