
According to the latest quotes from Microsoft, this is the price that they are shooting for. Many OEMs don't seem to be so happy about this though as it will more than likely trigger a hike in netbook prices, as much as $50.
OEMs are trying to negotiate a lower price with Microsoft because this price increase could prove to be a big blow in the netbook market where Windows 7 Starter is primarly expected to be seen. $50 is a very big difference in the low end market and could negatively impact sales.
Microsoft is expected to announce retail prices for Windows 7 sometime around the end of this month. Windows 7 Starter probably will not be included in the announcement though as Microsoft will primarily push it through OEMs and would rather sell Home Premium and Professional instead.