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.
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It seems like Microsoft has realized that the market today isn’t exactly like it was a few years back and charging licencing fee from OEMs isn’t exactly the best way to generate revenue nowadays. To stop the onslaught from Apple’s iPad and Chromebooks, the company is reportedly slashing the licencing fee for Windows 8.1 by almost 70 percent for low cost devices. This should bring the price of the OS as low as $15 for devices cheaper than $250. Currently the fee is closer to $50 per license. The discount will be applicable on tablets and netbooks lower than the $250 price tag, irrespective of their size.Windows 8, which has sold close to 200 million licences till now, has failed to make an impact in the tablet market where even Google and Android have caught up with iPad in terms of sales. While the PC market is on the decline and the tablet market is expected to bloom, Microsoft wouldn’t want to get it wrong this time around. We’ve seen how 7 inch tablets changed the game for Android and don’t see why it won’t be possible for Windows.
Source: bloomberg
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