Microsoft unveils cut-rate Windows XP

updated 7:56 a.m. ET June 29, 2005

MEXICO CITY - Beset by rampant counterfeiting across Latin America, Microsoft on Tuesday introduced a cut-rate, reduced version of Windows XP that is aimed at first-time, low-income computer users who might otherwise run pirated software.

XP Starter Edition helps users learn to use a mouse and other computer devices, but strips out networking, limits the number of programs that can open and won't work on top-level processors.

The program "is for people who want access to legal software," said Microsoft Mexico General Director Felipe Sanchez Romero.  The company sees a large potential market, given that 83 percent of Mexicans don't have personal computers.

The company says most novice users don't need the advanced functions and it says it has designed the bottom-tier version of XP to be "an affordable and simple introduction to personal computing."

(MSNBC is a Microsoft - NBC joint venture.)

Microsoft launched the Spanish language version of the program at a news conference in Mexico City that featured several partners, including a state-owned lending agency, the main phone company Telmex and local computer manufacturers Texa, Lanix and Hergo.

The software will be available only pre-installed on machines, not as a boxed product. Microsoft has not offered it in the United States or western Europe.

The company earlier had released versions in Thailand, India, Russia, Malaysia and Brazil — other markets where counterfeiting is common.

A report by the Gartner consulting company last year criticized the product for limiting upgrade opportunities as people gain expertise.

Sanchez Romero said last week that about 65 percent of the software used in Mexico is pirated. Even some small local computer makers include counterfeit versions of Microsoft Office on their machines and counterfeit software is sold openly at hundreds of impromptu stalls on Mexico City sidewalks.

While mainline computer makers usually include Windows, customers who want to buy a legal boxed version of Windows XP Home must pay more than $300 — almost a month's wage for the average Mexican worker.  A boxed package of XP Pro costs about $500 at major computer stores in Mexico City.

The ubiquity of pirated Windows software also may have slowed Mexico's adoption of a Windows rival, the open-source software Linux, which has grown more rapidly in other Latin American nations.

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