Page last updated at 10:29 GMT, Wednesday, 4 June 2008 11:29 UK

Microsoft grants XP new lifeline

Windows XP on sale, PA
The life of Windows XP has been extended twice before

Microsoft has given another lease of life to Windows XP only days before PC makers have to stop selling it.

Windows XP reaches its end of life on 30 June but Microsoft has now said it can continue being sold until June 2010 but only on cheap desktops.

The decision follows one made in April to extend the life of XP on low cost laptops until the same date.

It comes as Dell, HP and Lenovo exploit loopholes in Microsoft's licensing terms to keep putting XP on machines.

Growing market

In an announcement at the Computex trade show in Taiwan, Microsoft said the decision was prompted by customers asking for the software to be put on low cost desktops.

Industry experts believe the decision is also motivated by the fact that low cost machines cannot run Windows Vista - the newest version of the operating system.

They also say that many of the low cost laptops run Linux - an open source rival to Microsoft's operating system.

Low cost laptops, such as the Asus Eee PC, have proved hugely popular. Research firm IDC predicts that sales of ultra low-cost notebooks, will reach nine million units in 2012.

The extension Microsoft granted to XP for these low cost laptops, or netbooks, covered machines that have no more than 1GB of RAM; a hard drive up to 80GB in size; a processor running no faster than 1GHz; a screen no larger than 10.2in (25cm) and no touch screen.

So far Microsoft has laid down no specifications for the low cost desktops, called nettops, but it said it was working with 20 PC makers on these machines.

The terms of Microsoft's licensing arrangements with PC makers dictate that they must stop offering XP as an option on new machines after 30 June.

Many PC makers have flouted this cut off by shipping machines running certain versions of Vista with a "downgrade licence" that lets customers revert to the older operating system.

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