Microsoft said to cut Windows licensing fees by 70% to counter rivals

Status
Not open for further replies.
G

GK86

Homeland Security Fail
Link. Searched and didn't see a thread.

Microsoft Corp. (MSFT) is cutting the price of Windows 8.1 by 70 percent for makers of low-cost computers and tablets as they try to fend off cheaper rivals like Google Inc. (GOOG)’s Chromebooks, people familiar with the program said.

Manufacturers will be charged $15 to license Windows 8.1 and preinstall it on devices that retail for less than $250, instead of the usual fee of $50, said the people, who asked not to be named because the details aren’t public. The discount will apply to any products that meet the price limit, with no restrictions on the size or type of device, the people said.

Stronger competition from Apple Inc. (AAPL) and Google cut revenue last quarter at Microsoft’s devices and consumer licensing division, which includes Windows software, as the computer industry posted its biggest annual decline on record. By offering incentives for PC makers to sell cheaper models, Microsoft may be able to increase its share of the growing $80 billion tablet market and stave off Chromebooks, notebooks that run Google’s operating system.

Microsoft, which named Satya Nadella as CEO earlier this month, is seeking to speed up development and introduction of new devices. It won’t require products that use the cheaper licensing to complete logo certification, a process that verifies hardware compatibility, one of the people said. Devices aren’t required to be touch-screen compatible, they said.

Julia Kelly-Echeverio, a spokeswoman for Microsoft, declined to comment.

Slower Adoption

Microsoft said earlier this month that it has sold more than 200 million licenses of Windows 8 since the program went on sale in October 2012, a slower rate of adoption than the previous Windows 7.

While the regular Windows list price was $50, some of the largest global computer makers paid closer to $30 after incentives such as marketing funds provided by Microsoft, the people said. Products that receive discounted license fees won’t be eligible for such marketing support and incentives, one of the people said.

Global computer shipments fell a record 10 percent last year and are forecast to continue to decline this year as tablets and smartphones lure consumers away from traditional desktop and notebook designs, according to data from market research firm IDC. Tablet sales volume -- dominated by Apple and Google, whose operating systems account for 95 percent of that market -- will climb an average 16 percent through to 2017.
Click to expand...
 
What?!?

Oh, this is for manufacturers...

I'm not sure it's enough really. They're best hope is probably to start trying to compete on services because other people are offering their software for free.
 
This is a good and aggressive move and should give nice breathing room to current OEMs to be able to increase margins or be a little more price competitive, but given that competitors charge $0, I'm not sure it'll stem the OEM mad dash towards Android and Chrome OS in the long run. This is the most serious long-term structural challenge Microsoft faces as a company.
 
how about you sell it directly to me for 15 dollars

then i might throw just that your way

1ZDI8.gif
 
SteveWinwood said:
how about you sell it directly to me for 15 dollars

then i might throw just that your way

1ZDI8.gif
Click to expand...

I do wonder how many more consumer copies of Windows they would sell if they sold them at $15-$40, because I suspect that the current number of licences they sell straight to consumers doesn't match the number of homemade PC's whatsoever...
 
SteveWinwood said:
how about you sell it directly to me for 15 dollars

then i might throw just that your way

1ZDI8.gif
Click to expand...
As if, how dare you expect to pay less. Helping out hardware manufacturers to stop them abandoning your failing OS is far more important than reducing the price to consumers.
 
If I could get a license from them for $20 or $30 I would probably switch, if only to get them improved performance in games. Otherwise I am happy with Win7.
 
This is both good and bad, good in that they'll be more competitive, but bad because they're giving up a lot of profit here. They're Windows licensing business is going to take a beating when it comes to revenues.
 
MercuryLS said:
This is both good and bad, good in that they'll be more competitive, but bad because they're giving up a lot of profit here. They're Windows licensing business is going to take a beating when it comes to revenues.
Click to expand...

All true. But since the competition is free, they don't have a choice. It's much like how internet browsers became free. Once one big one became free, they all had to become free.

What Microsoft needs to do is sell Windows for free, but use it to boost other services where they make money. Use it to boost Office, Bing, and other Internet-based services where they can push ads and content to users. And frankly, create more internet-based services to be consumed. They should be entering more industries. Basically, the Google approach.
 
Apple and Google understand the 21st Century: People want to pay for the hardware, not the OS.

Microsoft is panicking, because while Apple sells hardware and Google sells advertising, they don't have those options. (Aside from Surface, which isn't doing too hot.)
 
jstripes said:
Apple and Google understand the 21st Century: People want to pay for the hardware, not the OS.

Microsoft is panicking, because while Apple sells hardware and Google sells advertising, they don't have those options. (Aside from Surface, which isn't doing too hot.)
Click to expand...

I think people are fine with paying for windows. Just not windows 8
 
Future said:
I think people are fine with paying for windows. Just not windows 8
Click to expand...

Windows 7 had the Family Pack 3 pack for $150 or even less. Windows 8 you could get for cheap if it was an upgrade. With 8.1, I think they went back to like $200 or something. They are going backwards. Of course, a lot of people who build PC's get the OEM version for $99.
 
9thwonder said:
I wonder how this will affect steam boxes.
Click to expand...

The box would need be less than $250 which isn't very realistic. I would also be surprised if anyone at Microsoft cared that SteamOS existed.

This move is aimed directly at chromebooks. They did the same thing with XP on netbooks.
 
would totally upgrade to windows 8 for <= 40 bucks.

Get on that shit microsoft. every other operating system in use is free for upgrades, at least lower your ridiculous prices a tinsy bit.
 
They are in such a weird position. It feels like their brand has become poisonous.

I look at things like Windows Phone and Surface and see really well designed and beautiful stuff....but I never buy any of it. They always seem just slightly behind.
 
Too little too late IMO. It's bad enough that they were charging to consumers and OEMs alike what they were before, but their OS was and will still be continued to be riddled with ads and other bullshit of the like.
 
googleplex said:
When I was at the mall the other day and saw a lot of smaller businesses using IPads as their cash register.
Click to expand...

Very very common. Once Square Payments went live with their POS solution and companies like Quicken all jumped on the bandwagon, everyone realized that a much better solution was sitting in their hands already.
 
Interested to see how this affects their revenue stream. If there's not enough additional volume to counter the drop, it won't be pretty..
 
Status
Not open for further replies.

Similar threads

  • Poll
Former employee says Microsoft doesn't really care if you pirate Windows
Business  2
67
5K
Diddy X replied
Treasury Transforms to New Identity, As Your Pennies Will Be Cut Off to Reduce Waste
2
69
3K
Ecotic replied
Oracle and Microsoft are reportedly in talks to take over TikTok
17
1K
No BBC=Anger replied
Godzilla was released 70 years ago
13
927
The Cockatrice replied
Microsoft says it’s starting to test ads inside the Start menu on Windows 11
2
65
5K
Badlucktroll replied
Top Bottom