Thinking out loud & need some help/verification.
I've never bought a Windows computer (though we sold IBM/PCs in our stores). I have bought Windows XP to run under Parallels emulation on a Mac...
I got a bootleg disk of Windows NT (from...) and bought a NT - XP upgrade. AIR, The upgrade cost $249.
We haven't used Windows in over 3 years (probably 5) so we don't have it or Parallels on any of our computers, anymore.
So here's what I am trying to determine for Windows (preferably Windows 7 Home Premium):
- What is the cost to manufacturer's per copy of Windows(included when you buy a pc)?
- What is the retail price of Windows?
- Are the Windows disks tied to a computer, or can you install one copy on every computer in your home?
For 1) above the best I can determine is between $68-$100 per copy. http://answers.yahoo.com/question/index?qid=20120413083907AAwEdew
For 3) above, in my limited experience the copy was tied to a single computer -- though you could move the copy from one computer, you couldn't use it on both.
What I am trying to determine is how much trouble (evaporation of Windows profit) Microsoft faces due to:
- stagnation of new sales of pcs
- unwillingness/delay in upgrading to the latest release
- difficulty of upgrading
- cost of upgrading
For sake of comparison let's assume:
- that the consumer has several computers with the current OS installed
- that the consumer is running Windows 7 or Lion depending on platform
- that Windows 7 and Lion are equal in capability, appeal, ease of use... we're not talking switchers
- that the consumer desires to upgrade to the New version (Windows 8 or Mountain Lion) when it is released
So, here goes for the Mac:
OS X Mountain Lion
- single variant for user needs from entry to pro (all features present)
- no variant upgrades
- $19 price of upgrade
- 1 upgrade copy for all your personal computers
- upgrade downloadable from the app store less than 1 hour
- fast upgrade install -- less than 1 hour
- untended upgrade install -- answer a few questions at the start, then leave untended... your computer will reboot when done
- can co-exist with prior versions of OS X on same machine (different HDDs or Partitions)
- no serial numbers, authorization or callbacks
As I understand the MS Business Model
- pre-install a basic Windows variant on each machine at the manufacturers (license)
- sell variant upgrades -- directly or through software resellers
- sell version upgrades (e.g. Windows 8) directly or through software resellers
- Windows 8 will still have variants (I think)
- Windows 8 will be downloadable (I think)
- Windows 8 will cost more than $100 to upgrade an existing machine (I assume)
- Windows 8 will be tied to a single machine (I assume)
- Windows 8 will be a long install, tended: requiring user input throughout the process (I assume)
Depending on the answers to some of these questions, and the decline/disruption in the pc market)MS could be witnessing the collapse of their business model for consumers.
Cihra believes that a quarter of tablet purchases are truly direct replacements for PCs, while another quarter are "effectively" replacing PCs, as users delay purchasing a new computer by getting an iPad or another tablet.
If the quote from this article is true, then (based on the 16 million iPads sold last quarter est.) 4 million pc sales are being lost to tablets per quarter, and another 4 million pc purchases are being "effective;y replaced" (delayed).
That's 8 million x 95% == 7.6 million Windows licences lost per quarter... Or 7.6 million x $100 == $700 million lost revenue to MS per quarter -- just due to the iPad disruption.
Mmm... Methinks we know why Gates, Ballmer, et al have their panties in a wad.
Add to that:
- the general decline in Windows pc sales
- the uncertainty that Windows 8 will be acceptable to upgrade the bulk of existing users' computers (or even for new hardware purchases)
- the pressure of competition (mainly Apple) to change the structure (variants) and pricing of the OS
This could signify tectonic shift in MS' revenue from Windows.
And just to add salt to the wound, the same pressures are beginning to apply to application software for pcs (no feature/price variants, downloadable, 1 copy for all your personal computers, etc.).
Is it too early to ask if the MS business model is sustainable?
If not, then what?