Microsoft to reportedly cut Windows pricing by 70% as Apple, Google eat PC marketshare

Posted:
in General Discussion edited July 2014
As the mobile device market -- led by device from Apple and Google -- continues to devour traditional PC marketshare, Microsoft is reportedly looking cheaper Windows licensing fees in a bid to stop the hemorrhaging.

Windows 8.1


Citing people familiar with the matter, Bloomberg reports Microsoft will slash Windows licensing fees by 70 percent for low-cost hardware manufacturers in an attempt to regain marketshare lost to devices running iOS, Android and Chrome.

Under the supposed pricing scheme, OEMs will pay $15 to preinstall Windows 8.1 on devices that sell for less than $250. The fee is down from a traditional rate of $50 per device. Further, Microsoft will not impose restrictions on hardware size or form factor as long as the final product meets the required low retail price.

In addition to the lower fees, Microsoft will also relax its licensing standards by allowing manufacturers using the cheaper rates to forego logo certification. Usually, hardware compatibility is vetted by the Redmond, Wash., company. In addition, these sub-$250 products do not have to be touch enabled.

Recently-appointed Microsoft CEO Satya Nadella is said to be pushing for accelerated development and launch timelines for new Windows devices. The rumored licensing price cuts may be part of that plan.

Friday's report follows rumors that Microsoft is "seriously considerding" allowing Android apps to run on both the PC and mobile iterations of Windows. The move would allow the Windows maker to tap into Google's immense share of the mobile device market.
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Comments

  • Reply 1 of 127
    solipsismxsolipsismx Posts: 19,566member
    These might stave off weakening PC sales and market share slightly but it doesn't resolve their core issues. I hope to see something more radical from Nadella this year but admittedly it could take years before a new direction might make it to market. It's a good thing for them they enough money to bleed for at least another decade.
  • Reply 2 of 127
    sockrolidsockrolid Posts: 2,788member

    Originally Posted by AppleInsider View Post



    In addition to the lower fees, Microsoft will also relax its licensing standards by allowing manufacturers using the cheaper rates to forego logo certification.

     

    "There are levels of survival we are prepared to accept."

    ?- The Architect, "The Matrix Reloaded"

  • Reply 3 of 127
    Originally Posted by SockRolid View Post

    "There are levels of survival we are prepared to accept."

    ?- The Architect, "The Matrix Reloaded"


     

    Can’t thumb that up enough. Speaks volumes about where Microsoft is as a company these days.

  • Reply 4 of 127
    Still $15 too high...
  • Reply 5 of 127
    so... just so i am clear- they are not holding a minimum level anymore? so any crap device that can barely run a .dll filled menagerie that will give a user an ugly experience is now ok?

    i for one, am glad that there is a companies like apple and lenovo who offer computers that have a high standard for its components so as to not release a $100 laptop that is buggered down in a month providing the a 'great' windows experience.
  • Reply 6 of 127

    Why don't they just focus on making their software worth a fair fee? I think cost is part of the issue, but more so the OS itself.

  • Reply 7 of 127
    The title gives a very different idea than the article. "Microsoft to reportedly cut Windows pricing by 70%..." gives a different vision than "Microsoft will slash Windows licensing fees by 70 percent for low-cost hardware manufacturers". As a PC builder I have a lot of interest in one of those. The other, I have none.
  • Reply 8 of 127

    I would say that they finally have someone who has enough humility to honestly attack their problems head on.  It says something that it took firing the last CEO jus to get to the point where they are immediately responding to market forces.  Apples change from a has been to the largest company in the world was driven by a ruthless blood letting that killed all that was still good about the old Apple so the new Apple would have the resources to build better products.  

     

    If Intel was selling their base chips for $15- $20 a pop you would see some real competition for Apple and Android.  Part of the problems for PC OEM"s has been so little room to battle over price.  Microsoft should have made the price a percentage of the list price except for their top 2 versions.  They need to slowly kill windows and commit to building a better operating system.

     

    I have been repeating my self on several websites, but the underlying problem is not just Apple making a better product.  The underlying problem is Moore's law is dying rapidly.  Back in 2002 Intel lost the ability to ramp up frequency with each new process node.  We have been stuck at 2.5 Ghz since 2002 and nothing anyone has done has changed this.  The PC has gone from being an expensive item that needed to be replaced every 2 years to something more akin to a TV.  I am typing this on a 5 year old Apple laptop which was the bottom of the Macbook Pro line when it was released in 2008.  The only function that has gone out of date is the graphics card for gaming.  Graphics cards have been able to stall their problems because of the parallel nature of their work load.  Multi processors can actually make a significant improvement over time.  Microsoft has no longer been able to count on obsolescence to force the replacement of desktops.  It is no coincidence that Windows XP is still around since it was the system in place when frequency his the wall at 2.5 Ghz in 2002.

     

    Mobile has been able to catch up to the PC market based on the lower power envelope that allowed the frequency improvements to continue along with the rising transistor counts.  In 2002 ARM was rocking a 13 Mhz chip.  Those inexpensive and very power efficient chips have come a long way in 12 years. 

  • Reply 9 of 127

    Originally Posted by Sam Graves View Post



    The title gives a very different idea than the article. "Microsoft to reportedly cut Windows pricing by 70%..." gives a different vision than "Microsoft will slash Windows licensing fees by 70 percent for low-cost hardware manufacturers". As a PC builder I have a lot of interest in one of those. The other, I have none.

     

    Just be glad if the Windows Tax (tm) is slashed.

    Is that the one you're interested in?

  • Reply 10 of 127
    Quote:

    Originally Posted by SockRolid View Post

     

     

    Just be glad if the Windows Tax (tm) is slashed.

    Is that the one you're interested in?


     

    No, it's the other one. Why would the OP (or anyone else) be interested in the price of Windows on junk hardware?

  • Reply 11 of 127
    Quote:

    Originally Posted by Macnewsjunkie View Post

     

    I would say that they finally have someone who has enough humility to honestly attack their problems head on.  It says something that it took firing the last CEO jus to get to the point where they are immediately responding to market forces.  Apples change from a has been to the largest company in the world was driven by a ruthless blood letting that killed all that was still good about the old Apple so the new Apple would have the resources to build better products.  

     

    If Intel was selling their base chips for $15- $20 a pop you would see some real competition for Apple and Android.  Part of the problems for PC OEM"s has been so little room to battle over price.  Microsoft should have made the price a percentage of the list price except for their top 2 versions.  They need to slowly kill windows and commit to building a better operating system.

     

    I have been repeating my self on several websites, but the underlying problem is not just Apple making a better product.  The underlying problem is Moore's law is dying rapidly.  Back in 2002 Intel lost the ability to ramp up frequency with each new process node.  We have been stuck at 2.5 Ghz since 2002 and nothing anyone has done has changed this.  The PC has gone from being an expensive item that needed to be replaced every 2 years to something more akin to a TV.  I am typing this on a 5 year old Apple laptop which was the bottom of the Macbook Pro line when it was released in 2008.  The only function that has gone out of date is the graphics card for gaming.  Graphics cards have been able to stall their problems because of the parallel nature of their work load.  Multi processors can actually make a significant improvement over time.  Microsoft has no longer been able to count on obsolescence to force the replacement of desktops.  It is no coincidence that Windows XP is still around since it was the system in place when frequency his the wall at 2.5 Ghz in 2002.

     

    Mobile has been able to catch up to the PC market based on the lower power envelope that allowed the frequency improvements to continue along with the rising transistor counts.  In 2002 ARM was rocking a 13 Mhz chip.  Those inexpensive and very power efficient chips have come a long way in 12 years. 


     

    They need to "slowly kill windows"? You mean, they should slaughter one of their two cash cows, for a product that does not yet exist? The bloodletting whereof you speak at Apple happened when Apple was a marginal player, at best. MSFT, with all their problems, remains immensely profitable.

  • Reply 12 of 127
    No matter how cheap u make manure, it's still manure.
  • Reply 13 of 127
    Now if they sent some thugs door to door saying: "Give us $15 or we'll install Windows on your computer", they might make some money. I know I couldn't pay fast enough!
  • Reply 14 of 127

    I think the obvious consequence of this move is that PC makers will double down on the bloatware. PC makers get paid for each piece of crapware they put on the computers they sell, and the easiest way to get their crap hardware under a $250 max limit is to load up on the crapware. The user experience for these machines is going to get even worse than it is now, something that is only going to damage the "Windows" brand further in the long term.

  • Reply 15 of 127
    asciiascii Posts: 5,941member

    The main problem with Windows 8.1 is not the price, it's all the tablet stuff that makes it hard to use on a desktop computer. If you are primarily selling to corporate customers you can make stuff hard to use and that's ok, they will just send their staff on training courses, but if you're selling to consumers it has to be easy. Microsoft should go on an "easy" crusade not a price crusade.

  • Reply 16 of 127
    Quote:

    Originally Posted by SolipsismX View Post



    These might stave off weakening PC sales and market share slightly but it doesn't resolve their core issues. I hope to see something more radical from Nadella this year but admittedly it could take years before a new direction might make it to market. It's a good thing for them they enough money to bleed for at least another decade.

    This is nothing more than to combat rising sales of Chromebooks.  For PC's costing more than $250 or for those upgrading from a previous version of Windows, it's business as usual.  This is nothing more than a token gesture. 

  • Reply 17 of 127
    As the mobile device market -- led by device from Apple and Google -- continues to devour traditional PC marketshare, Microsoft is reportedly looking cheaper Windows licensing fees in a bid to stop the hemorrhaging.

    Citing people familiar with the matter, <em>Bloomberg</em> reports Microsoft will slash Windows licensing fees <a href="http://www.bloomberg.com/news/2014-02-22/microsoft-said-to-cut-windows-price-70-to-counter-rivals.html">by 70 percent</a> for low-cost hardware manufacturers in an attempt to regain marketshare lost to devices running iOS, Android and Chrome.

    Under the supposed pricing scheme, OEMs will pay $15 to preinstall Windows 8.1 on devices that sell for less than $250. The fee is down from a traditional rate of $50 per device. Further, Microsoft will not impose restrictions on hardware size or form factor as long as the final product meets the required low retail price.

    In addition to the lower fees, Microsoft will also relax its licensing standards by allowing manufacturers using the cheaper rates to forego logo certification. Usually, hardware compatibility is vetted by the Redmond, Wash., company. In addition, these sub-$250 products do not have to be touch enabled.

    Recently-appointed Microsoft CEO <a href="http://appleinsider.com/articles/14/02/04/microsoft-officially-names-satya-nadella-ceo-bill-gates-steps-down-as-chairman">Satya Nadella</a> is said to be pushing for accelerated development and launch timelines for new Windows devices. The rumored licensing price cuts may be part of that plan.

    Friday's report follows rumors that Microsoft is "<a href="http://appleinsider.com/articles/14/02/12/microsoft-considering-allowing-android-apps-to-run-on-windows---report">seriously considerding</a>" allowing Android apps to run on both the PC and mobile iterations of Windows. The move would allow the Windows maker to tap into Google's <a href="http://appleinsider.com/articles/13/11/12/idc-data-shows-66-of-androids-81-smartphone-share-are-junk-phones-selling-for-215">immense share</a> of the mobile device market.


    Every ine of those paragraphs predicts something good for Apple in the near future. Ballmer's parting gift to Apple has been Windows 8.
  • Reply 18 of 127
    The cost of Windows has made it very hard to build and sell PC's competitively. The big brands get it cheaper and the small stores are forced to pay $90 wholesale for a Windows7 license. As a result, small stores do not sell as many units, and often repair vs replace units. If they made more money selling new units, more new units would be sold. Microsoft needs to lower the cost to all customers.
  • Reply 19 of 127

    Geez these sub-$250 computers will be built so horribly, I mean more so than usual.

  • Reply 20 of 127
    snovasnova Posts: 1,281member
    If you cut the cost of windows by 70% how many more units must you sell to break even? Ponder that for a moment.
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