Microsoft has announced that it will cut the price of its XP operating system for ultra-low cost PCs that are built for emerging markets.

Although it has yet to confirm that XP will be handed a stay of execution for PC manufacturers, the OS will remain for the ultra-portable market and for projects that are trying to build ULCPCs for the likes of India and China.

Linux

Currently Microsoft is competing with the likes of Linux, which is freeware, but the prospect of $16 XP could lure manufacturers into plumping for the tried and tested software from the Redmond company.

The pricing is actually $26 dollars, but companies can potentially get a $10 rebate.

Currently the offer only stands if the screen size of the PC is less than 10.2 inches with a HDD of less than 80Gbytes, with Microsoft keen to ensure that their lower cost option doesn’t impinge on the sales of their flagship OS Vista.