The Problem with Bundling

On Friday I spoke with two product executives from a major OEM about some forthcoming new PCs and notebooks. During the conversation, I asked about their Windows Media Center strategy. The OEM no longer has one, and Vista integration is the reason. The response is surprising, because Media Center integration into Vista was supposed to benefit Microsoft, its customers and partners. But that's not how this OEM sees it. Reasoning: The discreet SKU's disappearance makes Media Center differentiation more difficult among OEMs, so there is no real competitive advantage. The product executives expressed concern that Media Center promotion for the OEM's products might benefit competitors.

The conversation was a broad indictment of Microsoft's whole Vista SKU strategy. Rather than differentiate products around Vista SKUs, the OEM has instead returned to emphasizing performance metrics and made product design a greater priority. That's opposite the intention of Microsoft's Vista SKU strategy, which was supposed to encourage greater differentiation around operating system capabilities.

View: The full story @ MS-Watch

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