AppleInsider claims that a source at Hewlett-Packard has told them that Microsoft has agreed to allow Windows XP as an option on new PCs/laptops through at least April 30, 2010. They reference an internal memo/email discussing Microsoft’s plans in regards to XP and Windows 7 even though, as the memo points out, mainstream support for Windows XP Professional ends this month (April 14th). Currently Windows XP Pro and Windows XP Tablet PC are bundled as restore options (or “XP downgrade”) for Windows Vista licenses on new PCs. That is supposed to expire July 31, unless they reach an agreement with Microsoft.
They also mention a Computerworld article from a few months ago discussing how important downgrade rights would be, even with Windows 7 alleviating many of the issues that people had with Windows Vista.
Windows XP Home is still sold on various laptops/ultraportables in the “netbook” range from all of the mainstream manufacturers, due to performance issues with Windows Vista. Windows 7 addresses many of the performance issues, and that wasn’t mentioned. Ideally, at least as far as Microsoft is concerned, many of the manufacturers would switch to Windows 7 after OEM versions become available. Right now Microsoft is having to sell Windows XP Home at a heavy discount, and it is depressing their revenue/profit. Windows 7 on these devices would be a huge revenue boost for Microsoft, however if they price it too high, thereby taking away a part of the appeal of these devices (low pricing), manufacturers might push back and either install Windows XP Home or some form of Linux.