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February 21, 2014

Microsoft to cut Windows price for low cost PCs and tablets

Posted by David Hunter at 10:35 PM ET.

Tim Culpan and Dina Bass from Bloomberg have got a scoop – Microsoft Said to Cut Windows Price 70% to Counter Rivals:

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.

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.

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.

Free always beats fee as long as the free product is good enough and Chromebooks are evidently good enough for a lot of folks. Microsoft could try to appeal to the carriage trade like Apple but are way behind on both low end apps and cachet. I don’t really think a price cut is going to give Microsoft much more traction.



Filed under Apple, Coopetition, Google, Microsoft, OS - Client, Windows 8

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