Microsoft plans to use Windows 7 to raise netbook prices

Posted:
in General Discussion edited January 2014
The prospects of a premium priced Apple tablet computer may brighten at the hands of an unlikely ally, if Microsoft can carry out its stated goal of raising netbook prices using Windows 7.



After publicly advertising the idea that Windows PCs are cheaper than Macs in its "Laptop Hunter" ads, Microsoft CEO Steve Ballmer told an audience of financial analysts that the company's attempts to cut prices of Windows to induce demand in emerging markets had failed over the previous year, and that the solution to the company's woes will be to increase the price of computers.



"The theory was wrong," Ballmer said, explaining that there wasn't enough new demand to make up for the drop in profits. "You?ll see us address the theory. We?re going to readjust those prices north [using Windows 7]."



Reporting on the event, Peter Burrows of BusinessWeek wrote, "the company?s goal is to raise PC prices in the next year. That?s due both to expected popularity of a new class of higher-end and higher-priced netbooks, a new pricing strategy around Windows 7 that the company hopes will result in far more upgrades to premium SKUs, and a reversal of a strategy in the last year to cut prices to spur demand in emerging countries."



Lower competition, higher prices



The netbook segment of the PC market, introduced by a line of low cost, simplified mini-notebook models Acer debuted running Ubuntu Linux, captured the attention of PC sellers during Windows Vista's first year. The emergence of the new devices priced in the ballpark of $300 caught Microsoft off guard, and helped spoil the launch fireworks of Vista because the new operating system wasn't capable of running on the new stripped down machines.



Microsoft worked to eradicate Linux netbooks by pushing its PC partners to license Windows XP for next to nothing. This did nothing for Vista, but did result in the company being able to advertise that the new netbook category was still dominated by Windows. Moving forward, the capacity of netbooks to run Windows 7, which will not be offered for free, has been a major issue for Microsoft and its PC partners.



However, based on Ballmer's own comments, the ability of netbooks to run Windows 7 will involve both a redefinition of what a netbook is and a change in pricing, because Microsoft does not want to continue making lower and lower margins on the PC operating system software business it monopolizes.



Ballmer laughs off Apple gains



Burrows' report also noted that Ballmer laughed off the number of financial analysts in the room using Apple laptops. ?We have low share in the investor community. I see a lot of Apple logos,? Ballmer said. ?Don?t bother to hide them. I?ve already counted them. And it?s okay, feel free [to use them], so long as you?re running Office.?



Ballmer called Apple as a ?fine company? doing well with a low-volume, high-price strategy, but claimed Microsoft hasn't lost market share to Apple over the past year, and that any changes in reported share numbers are just ?a rounding error.? Share gains by Apple "cost us nothing," Ballmer said. "Hopefully, we?ll take share back from Apple. But they still sell only 10 million PCs a year, so it?s a limited opportunity."



Somewhat ironically, Microsoft has also been trumpeting its own tiny market share gains with its renamed search engine, despite having actually lost market share in the search business over the past few years. Additionally, Microsoft's gains have come out of the hide of Yahoo, which it hopes to team up with as a parter to take on Google.
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Comments

  • Reply 1 of 127
    al_bundyal_bundy Posts: 1,525member
    the fad will go away, even with the small screen i'll take my iphone over a netbook any day.
  • Reply 2 of 127
    rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by AppleInsider View Post


    Burrows' report also noted that Ballmer laughed off the number of financial analysts in the room using Apple laptops. ?We have low share in the investor community. I see a lot of Apple logos,? Ballmer said. ?Don?t bother to hide them. I?ve already counted them. And it?s okay, feel free [to use them], so long as you?re running Office.?



    To which the investors turned their laptops around to expose to Ballmer that they are using Apple's iWork!
  • Reply 3 of 127
    jsavagejsavage Posts: 13member
    Not for anything, but the "next to nothing pricing" was clearly ruled anti-competitive in the whole Netscape debacle, wasn't it? Oh well.
  • Reply 4 of 127
    mactelmactel Posts: 1,275member
    I thought Windows was the working man's OS. Ballmer wants to stiff the working man now?
  • Reply 5 of 127
    javacowboyjavacowboy Posts: 864member
    I'm not sure why Microsoft thinks that it now owns the netbook market, when it doesn't even offer a version of Windows for ARM. What's more, Intel is planning to sell the entire widget with netbooks running Atom and Mobiln, and Google will come out with Chrome OS.



    Unless I'm missing something. Has Microsoft signed exclusive agreements with the netbook makers to distribute only Windows? What's in it for them if they can't threaten to install Linux on them.
  • Reply 6 of 127
    macosxpmacosxp Posts: 152member
    Apple owns more than 90% of the $1,000+ computer market, so Microsoft is very stupid to push more computers into that range.



    Linux is already popular on Netbooks. Wait for it to get more popular.



    And then Linux desktops are next.
  • Reply 7 of 127
    irelandireland Posts: 17,751member
    Please stop with the glorified titles Prince. MS are not the devil, you know.
  • Reply 8 of 127
    jazzgurujazzguru Posts: 6,435member
    Quote:
    Originally Posted by macosxp View Post


    Apple owns more than 90% of the $1,000+ computer market, so Microsoft is very stupid to push more computers into that range.



    Linux is already popular on Netbooks. Wait for it to get more popular.



    And then Linux desktops are next.



    Don't forget Google's Chrome OS, which is targeted mainly for netbooks (at first).
  • Reply 9 of 127
    quevarquevar Posts: 101member
    Quote:
    Originally Posted by Rot'nApple View Post


    To which the investors turned their laptops around to expose to Ballmer that they are using Apple's iWork!



    I can't help but think that the recent update to MS Office that dramatically improved it's speed is due to the fact that they are worried about many Mac users switching to Pages and Keynote. (Definitely Keynote, somewhat Pages, but definitely not Numbers, imo) They make a reasonable amount of money from their Mac BU and probably don't want to watch it slide away, especially if that base were to be increasing....
  • Reply 10 of 127
    lukeskymaclukeskymac Posts: 506member
    Quote:
    Originally Posted by Ireland View Post


    Please stop with the glorified titles Prince. MS are not the devil, you know.



    They sure come close to it...
  • Reply 11 of 127
    wobegonwobegon Posts: 764member
    Quote:
    Originally Posted by Ireland View Post


    Please stop with the glorified titles Prince. MS are not the devil, you know.



    Microsoft plans to use Windows 7 to raise netbook prices



    Where in that title is Microsoft proclaimed the devil?



    And what about it is 'glorified'? He's paraphrasing Ballmer's stated plan to raise the price of netbooks through the cost of Windows 7.
  • Reply 12 of 127
    camroidv27camroidv27 Posts: 523member
    And this relates to Apple how?

    Apple currently has no netbook.



    Since this article has no Apple relavance, then it only has one purpose being posted here.



    Please, focus on Apple products and such. I'm not here to read about M$ and their blunders. I want to read about Apple and their blunders (of which there are many)
  • Reply 13 of 127
    Quote:
    Originally Posted by camroidv27 View Post


    And this relates to Apple how?

    Apple currently has no netbook.



    Since this article has no Apple relavance, then it only has one purpose being posted here.



    Please, focus on Apple products and such. I'm not here to read about M$ and their blunders. I want to read about Apple and their blunders (of which there are many)



    I think Micro$oft blunders are pretty funny though
  • Reply 14 of 127
    jpellinojpellino Posts: 652member
    ... of the economics textbook that Ballmer is apparently using to shore up a table leg and make him read it? Demand goes down and prices go up? Talk about a reality distortion field. I want the pencil contract at Microsoft. They must be going through them by the gross, what with using them to repeatedly stab themselves in the thighs just to get through meetings with the marketing suits.
  • Reply 15 of 127
    Quote:
    Originally Posted by Quevar View Post


    I can't help but think that the recent update to MS Office that dramatically improved it's speed is due to the fact that they are worried about many Mac users switching to Pages and Keynote. (Definitely Keynote, somewhat Pages, but definitely not Numbers, imo) They make a reasonable amount of money from their Mac BU and probably don't want to watch it slide away, especially if that base were to be increasing....



    keynote is far superior to powerpoint. The last 9 months of being forced to use windows only at work has also made me think word is not so great either...
  • Reply 16 of 127
    mystigomystigo Posts: 140member
    I am a big Apple fan. But I own a lot of Microsoft stock. Ballmer is driving me crazy. He should not be in charge of Microsoft. His vision seems to consist of dismissing real competitive threats when they appear, and then blindly and belatedly chasing the markets he scoffed at months before.



    This is costing me a fortune.
  • Reply 17 of 127
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by Ireland View Post


    Please stop with the glorified titles Prince. MS are not the devil, you know.



    Or the devil you don't know?
  • Reply 18 of 127
    cbswecbswe Posts: 116member
    Quote:
    Originally Posted by camroidv27 View Post


    And this relates to Apple how?

    Apple currently has no netbook.



    Since this article has no Apple relavance, then it only has one purpose being posted here.



    Please, focus on Apple products and such. I'm not here to read about M$ and their blunders. I want to read about Apple and their blunders (of which there are many)





    Thats is ridiculous. Microsoft always got to do with apple. They're competitors.

    So every time MS does progress or has a backfall, it affects Apple.
  • Reply 19 of 127
    zunxzunx Posts: 620member
    What is the price of crap? Becase crap, even at low price, crap is!
  • Reply 20 of 127
    justflybobjustflybob Posts: 1,337member
    Quote:
    Originally Posted by Dr Millmoss View Post


    Are the devil you don't know?



    That's like the old "The Gnu knew he had a new cage".



    IMHO Micro$oft has been, and always will be, far worse than any fictional character any religion chooses to conjure up.



    But that's just me....



    And millions like me.
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