Are lower priced apps in Microsoft's future?

Microsoft has told its shareholders and the SEC that it is developing products "with basic functionality that are sold at lower prices than the standard version." But today, the company indicated this may not be anything new.

Whether Microsoft's plans for low-priced, general-purpose applications extend beyond its already acknowledged pilot of Works SE 9 is a question still hanging in the air this evening.

In its annual report, filed last week with the SEC, Microsoft said that "open source vendors are devoting considerable efforts to developing software that mimics the features and functionality of our products." Microsoft has been developing lower-priced products in response to this competition, according to the annual report.

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Yet when asked today for elaboration, a Microsoft spokesperson pointed BetaNews directly to a pilot of the free but advertising-supported Works SE 9 software which began about a year ago, and is apparently still under way.

"Microsoft introduced a pilot of Works in August '07 called Works SE 9. Works SE 9 enables our OEM partners to continue offering pre-installed productivity software at a reduced cost," the spokesperson said in an e-mail to BetaNews.

"Customers have told us they want a productivity solution already installed on their new PCs, and Works SE 9 makes it more affordable for our OEM partners to meet this customer need. The pilot is being run in limited markets with a limited number of OEM partners."

The spokesperson gave neither a confirmation nor a denial to BetaNews about other published reports, in which Microsoft's statements in the annual report were interpreted to mean that additional lower-priced products are on the way from Microsoft.

Although Microsoft had nothing more to say today on the subject of low-price software, it's interesting that the statements in its annual report come just at a time when a number of OEMs are readying new PCs in "mini" form factors. Some existing "minis," such as Asus' Eee, already run Linux. If OEMs want to keep costs down on Windows editions of "mini PCs," conceivably, they could be looking to Microsoft for lower cost application software to help them do just that.

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