Microsoft said to cut Windows price 70% to fend off Apple, Google

“Microsoft Corp. 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.’s Chromebooks, people familiar with the program said,” Tim Culpan and Dina Bass reports for Bloomberg.

“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,” Culpan and Bass reports. “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. 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,” Culpan and Bass reports. “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.”

Read more in the full article here.

MacDailyNews Take: The Dark Ages of Personal Computing are over. Microsoft could attempt to pay people to use Windows and it still wouldn’t work.


    1. It does not matter how much the cut the price of Windows, it won’t make a difference on the quality of the product you are buying; and because of that people still won’t buy it.

  1. You have to be kidding. Windows 8 will choke any computer priced less than $250. Windows is a humongous monstrosity that need lots of power and RAM to run smoothly and lots of power and RAM are not what you get for $250.

    1. Actually, the min requirements are a 1GHz processor and 1GB of RAM, according to M$’s website.

      However, the processor must support the PAE addressing schema which is probably available in most modern desktops & tablets.

  2. Windows’s PCs are getting a full scale attack on all price levels

    $1,000+ market (Macs rule)
    $300 – $999 market (Tablets)
    $199 – $299 market (Tablets, Smartphones, Chromebooks)

    Microsoft is getting hammered!

  3. Even $15 may spell the difference between profit or loss for some device makers. “Free” must scare the hell out of Microsoft. As well it should. It’s a brand new day and Microsoft has long lost it’s driver’s seat on the tech bus.

  4. Market forces eventually rule all, unless governments outlaw things. Windows at high price offered an opportunity for Linux and Apple to sell low or give the OS away.

    Capitalism doesn’t raise prices. In spite of what some political junkies try to say, it is market forces (capitalism) that continually drives efficiency and lowers costs and then prices. It is only when governments raise prices with fees, rules’ costs and outright taxes that prices do not follow market forces.

    Warren Buffett alluded to this over a decade back when he said he wouldn’t invest in software.

    1. These days, the term ‘market forces’ is NOT what it used to mean. Today’s market forces include:
      – Our Corporate Oligarchy effectively running aspects of our governments.
      – Blatant hardcore stock manipulation, despite conflicting reality.
      – Deceitful ‘sales’ figures.
      – Plagiarism, robbery, imitation rather than innovation.
      – Customer abuse, gouging, scouring.
      – Short term thinking, long term FAIL.

      On and on. It’s a messed over set of market forces these days. Good old supply and demand remain, but are far from alone.

  5. Here is Micro$ofts problem: They make money by selling software. Apple makes money by selling hardware. Apple provides some software to enhance and sustain the usability of their hardware. Not every piece you could imagine, but enough for many people to get by. And they sell software at a good price to support more advanced users in some areas. That echoing sound in the distance is nails being driven into coffins.

    Dear Micr$oft,

    What goes around comes around. You stole Apples UI back in the 90’s and convinced hardware builders to carry that part of the load. Now Apple is giving it away, to run on their hardware. The market for expensive OSs, especially poorly designed ones is dead. Buh bye now.

    1. “You stole Apples UI back in the 90′s…”

      Not true. Bill Gates reverse engineered the Macintosh in 1983/84 when Steve Jobs “loaned” Microsoft two Macintoshes for the purposes of designing Microsoft Word & Excel for the Mac platform.

      Incidentally, Microsoft Word for Windows wasn’t introduced until 1989.

      1. The novel _Microserfs_ by Douglas Coupland did a really good job of describing the “Chinese firewall” that was supposed to exist between Microsoft’s teams working on the Mac software applications and its own operating system. Bill Gates’s mantra to the OS development team was: “Make it more like the Mac!” It’s a really good book if anyone is interested in looking it up. The author also does a good job explaining how Microsoft could not buy QDOS — Quick and Dirty Operating System — from a Berkeley hippie programmer (he wanted it to be free to everyone) so MS could sell it to IBM …so Microsoft simply reverse-engineered QDOS to ‘create’ DOS: the only difference between them was the default drive letter (at the caret prompt). Douglas Coupland coined the term “Generation X”, too, by the way.

      2. They did try to produce something like the Mac OS before Windows 3, Word and Excel. Windows 2. Does anyone remember that atrocity? OMG. That was the worst OS in the history of computers. I don’t know what that development team was copying or trying to do. It was the ugliest UI ever.

        1. They did try to produce something like the Mac OS before Windows 3

          I was talking about Win 1.0.1

          In November of 1985, Microsoft released Windows 1, almost two-years after the release of Macintosh. That’s what Sculley and Gates went to war over.

          Win 1 was an MS-DOS application (shell) running on top of DOS and because Apple owned the patent for overlapping windows in a GUI, Microsoft was forced to go with tiled windows; the very same tile meme found in Windows 8 today.

          The Tile schema sucked then and apparently it still sucked until 2012 when Microsoft did away with Tiles in Windows 8.1.

  6. …as they try to fend off cheaper rivals like Google Inc.’s Chromebooks

    Seriously? Stupid minimal market share Chromebooks? Meh.

    The REAL situation: Apple’s Mac is consistently EATING Windows market share around the world, as it should. Microsoft is freaking out, as they should.

    Clue to Microsoft: Cheaper turds are still turds.

  7. This offer of low priced Windows for sub $250 computers will distort demand for computers priced between $250 and $400 and generate intense competition for $250 PCs. It will be hard to differentiate your product when everybody else is selling PCs for $250 too.

    At $250, prices will now be a little lower but margins will be razor thin, then there will be a step at $250 when the full price kicks in for Windows, so it will discourage people from buying at the lower-medium price range as the comparison with sub $250 models will be unfavourable. Once you approach the $500 level, having to pay the full cost of Windows won’t make such a percentage difference, but customers will start making comparisons with Apple products.

    With manufacturers already struggling to avoid losses from making PCs, Microsoft at the stroke of a pen has forced manufacturers to either make unprofitable cheap computers and sell them at the same price as everybody else, or else try to find a sweet spot at a higher price. They’re not managing to find a profitable price point at the moment, so it’s hard to see how they will find one in the future either.

    Microsoft has fallen into the market share trap. By cutting the price of Windows solely for unprofitably cheap PCs, they will put additional stress on PC manufacturers. More PCs will presumably be sold, so Windows numbers will increase, but at what cost to the manufacturers ? How many of them will be able to keep going in that sort of market ?

    I think that Microsoft would have done better to reduce the cost of Windows across the board by something more like 40-50%. Having two-level pricing does more harm than good and distorts the market, which was already a difficult place to operate within.

    1. Your right. This will encourage the manufacture of cheap Windows computers (emphasis on the word cheap) further eroding the reputation of Microsoft.

      Ever used a sub $250 computer. They’re way too much money for what you get.

      1. I have never used a Windows computer that wasn’t cheap.

        And by cheap, I mean layered plastic over a tin-rivet frame.

        There is no value in a Windows computer where price is the first concern and functionality is narrowed to office work and p0rn. Once the seals are broken its value plummets. When it clogs up, throw it away and buy a new one.

  8. Fighting to remain viable in a low margin commodity business has been and will be a loser proposition, forever.

    Chromebooks & ‘Winbooks’ will soon see that.

    iPads have been probably the number one new computing product of the last 5 years and Apple is not stopping. Developers are now doing things with iPads that would have astonished people when they were first released.

    Physical keyboards for the vast amount of users are close to dinosaurs.

      1. MacBook Air & MacBook Pro, which are in the minority compared to iPads and will most surely remain a minority product in the general user acceptance on unit volumes.

        Serious creation work will mostly stay on a keyboard, but the tap and swipe market is absolutely humongous.

  9. The $250 PC now becomes the $215 PC, and the manufacturers still won’t make enough money to stay in business. This will entice more unknowing people to opt for the $215 model who might have paid for the $350 one. But now there’s $135 to save instead of the $100. Think how many buyers of the $215 ones will be so disappointed with it’s performance that they won’t buy a Win-based product the next go around. Doesn’t sound like the start of anything great for MS. What else is new?

  10. So what, are the builders going to cut their price further? All Microsoft is doing is improving the builders bottom line so the will continue to build cheap computers. Microsoft is the Yugo of computers OS.

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