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Windows Businesses Microsoft Operating Systems The Almighty Buck

Microsoft Said To Cut Windows Price 70% For Low Cost Devices 178

Posted by timothy from the prices-convey-information dept.
kc123 writes with this except from Bloomberg News: "Microsoft 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'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. The discount will apply to any products that meet the price limit, with no restrictions on the size or type of device."
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Microsoft Said To Cut Windows Price 70% For Low Cost Devices More

Microsoft Said To Cut Windows Price 70% For Low Cost Devices

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  • At last (Score:5, Insightful)

    by MCROnline ( 1027312 ) on Saturday February 22, 2014 @02:37PM (#46311871)
    Now all we need is Windows retail to be a more realistic price too.

    • Re:At last (Score:5, Funny)

      by binarylarry ( 1338699 ) on Saturday February 22, 2014 @02:48PM (#46311951)

      If someone from Microsoft is reading this, I personally don't think I pay enough.

      I think the basic ad supported version of Windows 8 should start at $999 at least and go up from there for the more powerful versions.

      I always feel guilt buying copies of Windows because I know how much I'm ripping Microsoft off.

      • Re: (Score:3)

        by Luckyo ( 1726890 )

        It's good that piratebay offers a very good absolution from these feelings of guilt.

    • Too bad that Windows is so bloated, that money savings will be eaten up by extra hardware.

  • Whoop-de-do! (Score:5, Funny)

    by hughbar ( 579555 ) on Saturday February 22, 2014 @02:37PM (#46311875) Homepage
    If they pay me $15, I'll take a copy. Don't want it on any device I own or use though...

    • Re: (Score:3, Interesting)

      by the_humeister ( 922869 )

      I bought two copies for $15 each back when it first came out (promotion lasted for 6 months, was considering buying more just in case). Went from Windows 7 Home permium to Windows 8 Pro. Wasn't too bad of a purchase: 1) it's faster in games, 2) it comes with Hyper-V, 3) non-English language support (especially Chinese and Japanese) is much better than Windows 7. So what about Metro? What Metro? I have Classic Shell installed so I never see it.

    • You want a copy to prank somebody with? You're mean.

    • Re: (Score:2)

      by Rufty ( 37223 )
      Make it $5 and I'll take a DVD. My coffee cup coaster needs replacing.

    • Re: (Score:2)

      by DiEx-15 ( 959602 )

      If they pay me $15, I'll take a copy. Don't want it on any device I own or use though...

      They couldn't pay me enough to put WinBlows 8.1 on anything.

  • Good-bye middle tier (Score:5, Insightful)

    by SuperKendall ( 25149 ) on Saturday February 22, 2014 @02:42PM (#46311903)

    One unwanted side effect I can see coming from this, is that most Windows devices will become either very cheap (to meet the price guideline) or very expensive. If you build a device costing $500, the cheaper devices are not going to be that much lower in spec than you because they didn't have to eat a more expensive Windows license.

    When I read this story, I was excited because I thought it meant cheaper Windows for home users. I wouldn't mind running Windows 8 in Parallels on my mac, or even dual boot to it to play games. But the price for consumers is just too high for me to do that. They could get a lot of casual Windows sales and remain relevant but for some reason, they just don't seem interested in doing so.

    • Re: (Score:3)

      by Luckyo ( 1726890 )

      I don't think you need to worry. Windows 7, which is routinely sold with everything but cheapest stuff is not on the fire sale.

      This actually looks more like a desperate attempt to peddle win 8 under a different guise. Most of the mid range and higher ads that I see nowadays show win 7.

    • When I read this story, I was excited because I thought it meant cheaper Windows for home users. I wouldn't mind running Windows 8 in Parallels on my mac

      please get to a hospital NOW because you clearly have a fever of at least 105F.

    • Re: (Score:1)

      by Anonymous Coward

      and you'll be seeing under powered devices flood the market in hopes of gaining the $35/unit savings offered because to meet that price point there's not lots of hardware to run the full Windows 8.x OS. So we will see lots of dissatisfaction with performance much like what happened when netbook vendors switched from Linux to Windows XP. So more damage to the Microsoft brand and more customers running away disgusted.

      • I think you are right about this effect also, it pushes hardware to be cheaper and thus crappier to use.

      • Slowest hardware that can run Windows 8.1 will be 22nm Atom or AMD 1.0GHz dual core, with 2GB memory (4GB can be likely), and either 64GB flash or a modern hard drive. Decoding of youtube videos done in hardware when the vids are in H264 (dunno about VP9)
        There just doesn't exist crappier hardware on the market. Well, 32nm Atom sucks but Microsoft can exclude it from the agreement. So Windows 8 is guaranteed to work fine!

    • Re:Good-bye middle tier (Score:4, Interesting)

      by 140Mandak262Jamuna ( 970587 ) on Saturday February 22, 2014 @03:38PM (#46312193) Journal
      The difference is just 35$. That is going to kill the middle tier devices? Being a windows box is going to be a bigger disadvantage than 35$ for that 500$ device. Basic problem is there is no killer must have app for that mythical 500$ device. Penny pinchers want a simple sub 200$ machine. Bells and whistles fanboi\s don't care that much about the price.

      The problem for Microsoft is that it sells only to corporations and gamers. Both are not as price conscious as home users. But it has to fight a rear guard action to keep the home user in the fold. Otherwise they taste competing OS and see how others do it and demand Microsoft's feet to fire. They demand interoperability. There are people who have more powerful computing platforms in their pockets iPhones/androids/tablets than the corporation provided desktop they work on. The company workstation PC is hampered by layers and layers of IT clunkiness loaded on top of Microsoft cluelessness. I think this 15$ is just a PR stunt to fool the stock analysts, in reality Microsoft would be giving OS away for free without telling analysts.

      • The difference is just 35$. That is going to kill the middle tier devices? Being a windows box is going to be a bigger disadvantage than 35$ for that 500$ device.

        Most hardware OEMs have margins thin enough that 7% ($35) will easily make a difference between a profitable device and a money-loser on a $500 product.
        A sub-$300 device is even worse, with that $35 making up at least 11.5% of the total at $300, and growing as the overall price goes down.

        Seriously - the only lap/desktop/tablet OEM that has decent margins is Apple, and they obviously don't ship Windows with their products.

        • I was going to post the same thing but you laid it out perfectly. If you think about component costs in a $500 system, $35 buys you either better parts or something you wouldn't have otherwise, and like you say there is no margin on middle tier PC's.

          That's why I think it will mean more focus on either $250- systems, or $1000+ systems.

          • The truth from the consumer's perspective, though, is that the consumer will likely look at more than just a $15 price difference when assessing the value proposition between a $699 HP and a $684 Dell.

            • The truth from the consumer's perspective, though, is that the consumer will likely look at more than just a $15 price difference when assessing the value proposition between a $699 HP and a $684 Dell.

              Sales for both of those will suffer when people can buy a $250 device with similar specs.

              I'm not saying there will be no middle tier stuff, but focus will shift away from those.

        • This explains the rash of $249 PC's I've seen recently. The $300 PC market just became the $250 PC market. There's just not enough meat left on the bone, after paying the full boat Windows license, to make a $300 box better enough than a $250 box to justify the incremental cost, in the eyes of the typical "cost senstive" consumer who's actually buying these crap-can PC's. Aside from the bottom-feeder Celeron and AMD E-xxx CPU's already common at these price-points, OEM's will cheap out on fit/finsh, put few

      • Re:Good-bye middle tier (Score:4, Interesting)

        by fuzzyfuzzyfungus ( 1223518 ) on Saturday February 22, 2014 @06:23PM (#46313013) Journal
        At retail, $35 can get you 2GB of RAM from somebody you might actually respect, 4 from somebody who probably doesn't just sneak into competitors' factories at night to steal the stuff that failed QC...

        $35 is also, depending on the phase of the moon and where you fall in AMD and Nvidia's release cycles, enough to get you bumped a tier or two in GPU capability. HDDs are a similar story, you aren't going to do anything radical for $35 bucks(say a switch form cheap 'n capacious HDD to screaming-fast SSD); but you can probably squeeze 1 'unit' of additional capacity, exactly how many gigs that is depending on the conditions of the day and whether you are buying HDD or SSD, out of your vendor for $35.

        The less-visible-at retail stuff like fit-and-finish, case materials, what gets to be metal and what gets to be plastic, are harder for me to comment on; but 'just $35' can likely buy you 1 'bump' in any of the major spec areas, or some additional classiness in build quality. Especially if your ass is being kicked on industrial design grounds, or user dissatisfaction with your failure prone PSUs, that's not something to dismiss lightly...

      • That's $35 of "components" money, the manufacturer will want to make its usual 5% (or whatever) over it, then the distributor will want to make their usual 10%, but he'll also need insurance, what's paid over the product value, increasing it some extra 1% or 2%, then the store wants its usual 20% over the cumulative value... And lets not forget the government (whatever it is) taking taxes over revenue (they seem to be always there, it does not matter if you think your tax code is modern because you have a V

    • Given how much volume (if not necessarily profit) is handled by the middle tier, I'd be a bit surprised if all the major OEMs aren't having a...forceful...chat with MS right now about a licensing deal that either has more tiers, or is directly based on 'x percent of cost, capped at $y'.

      It certainly makes no sense at all for a $250 device to have a $50 Windows license attached to it(regardless of what MS, or anybody else, wants); but it also isn't obviously in either MS' interest, or in the PC OEM's inter

  • Microsoft, the former leader (Score:5, Insightful)

    by surfdaddy ( 930829 ) on Saturday February 22, 2014 @02:46PM (#46311941)
    They sat on their laurels too long under Ballmer and watched the market expand while they sat on the sidelines. They laughed at the iPhone when it first came out. Rather than putting Office on the iPad, they held it hostage to "protect" Windows. Five plus years later, they may finally do it. How much revenue did they give up there?

    They chased Google with Bing. They've chased Apple with the Zune, their music store, and their Windows Phone. They put the name Windows on everything - their cloud, their phone, their ARM tablet, and their regular PC OS, even though all those products are different. They are a MESS. Good luck to Satya - he will need it.

    • Judging by the price hikes for enterprise lixensing, it seems.Redmond plans on making up the difference by picking their busines customers' pockets.

      Too many more price hikes and I'll take the pain of moving to Samba. I've already decided Exchange 2010 is the last Exchange server I will put in my organisation, and now that I've become a partner I finally have the clout to make it stick.

      I can't see moving from Windows workstations but I can gut the backend.

      • Re: (Score:2, Interesting)

        by WuphonsReach ( 684551 )
        Samba4 works pretty well. The main place it still fails to deliver is replication of the SYSVOL, which is where your GPOs are stored. You have to make sure to only edit GPOs on a single server, then make sure to synchronize those files to all of the other domain controllers. It's not difficult, just not out-of-the-box easy.

        For a single-server shop, Samba4 is a good choice (even for migration away from a Windows server). For sites where you need more then one DC, there's still room for improvement.

        We
        • You would definitely know better than I about what it can and can't do, I'm just surprised to hear that SYSVOL replication, rather than any of the zillions of arcane MS-specific behaviors scattered across AD, would be the notable issue: Given the OSS-community love of building tools, I would have expected exactly the opposite: a situation where Samba4 plugs GPO storage and SYSVOL right into the capable hands of one or more of the modern revision control systems, offering lovely automatic versioning of all G

      • Judging by the price hikes for enterprise lixensing, it seems.Redmond plans on making up the difference by picking their busines customers' pockets.

        True, but how much longer will that last? Sure, enterprises are stuck in some aspects (e.g. Oracle costs way more than SQL Server), but not in others, especially as those price hikes have customers exploring alternatives (e.g. PostgreSQL), and trimming way the hell back on the rest of the EA, or even delaying renewal altogether in some cases.

        After all, I'm seeing an EA renewal coming up, and here's what I'm thinking:
        * I don't have to upgrade existing SQL 2k8 boxes if they still run just fine, and can likely

    • windows has never been first at anything.
    • They're a mess that had $77.85B in revenue last year ($21.86B net), $68B cash-in-hand, and one of the two or three best brands in the world. It will still be a tall order, but you don't need luck when you have those kind of resources.

    • The fact that the iPhone was (initially) very expensive, and exclusive to only one of the four major carriers, which greatly limited the initial market uptake. The "all screen" form factor, which eschewed the physical keyboard, was also seen with much skepticism initially. In the mid 2000's, when the iPhone was in gestation, Microsoft had all it could do putting out the twin fires of getting Longhorn (Vista) out the door, and patching the (barn door size) holes in XP's security. Though the decision proved c

  • better headlines... (Score:5, Funny)

    by Gravis Zero ( 934156 ) on Saturday February 22, 2014 @02:48PM (#46311953)

    Microsoft Becoming Desperate to Sell Window 8.1
    Microsoft Losing Badly in Tablet Market
    Chromebooks Out of Microsoft's Extortionary Reach
    Microsoft Discovers Battery Life Is Very Important On Tablets
    Microsoft Is Getting "Scroogled"
    Microsoft Just Got the Facts

    • Microsoft: Almost as horrible as Slashdot Beta

    • Microsoft is actually doing quite well with their current batch of tablets, with most models being sold out at many locations. They know battery life is important, and that's why their newest surface tablet runs for 10+ hours on a single charge.Not that many people are buying Chromebooks, and many of those who are, are buying one just to install Linux on it anyway. They may not have caught up to the iPad yet, but they actually have quite a strong product offering, especially if you look at the various table

      • Re: (Score:2)

        by Uberbah ( 647458 )

        Microsoft is actually doing quite well with their current batch of tablets, with most models being sold out at many locations.

        Easy to do with inventory manipulation, and it has two benefits. One, you aren't stuck with warehouses full of product that you have to practically give away to get rid off, like when HP dropped the price of the TouchPad to $100. Two, you get a headline of "Widget Sells Out", which is free advertizing and gives the illusion that the product is in demand.

        Neither of which means that

  • In my opinion, they _so_badly_ want to be the One Ring.

    I hope I live to see the day they are just a historical Wikipedia entry.

  • Device I want Windows on (Score:3)

    by randomErr ( 172078 ) <.ervin.kosch. .at. .gmail.com.> on Saturday February 22, 2014 @03:12PM (#46312071) Journal
    I would love to see Windows on BeagleBone Black. It would show that even cheap devices get the love of Windows and open the Windows store. Also it would look great for kids to experiment with Windows on a $45 computer. At the very least Microsoft could release that micro-kernel version of Windows for hobby/development devices and open up Visual Studio for development.

    • Re: (Score:2)

      by unimacs ( 597299 )
      Things like the RPi and the BBB bode well for the future of Linux and other free or mostly free OSes. Personally I would much rather see kids learning about computers on hardware running an OS that can be studied, picked apart, and modified as desired.

      I say this as somebody whose main computer runs OS/X which is a closed (or at least semi-closed) system. I'm quite content not to have it on a BBB.

    • Re: (Score:2)

      by unimacs ( 597299 )
      Oh and just curious. Have you spent much time working with linux and/or open source development tools? Visual Studio is very slick and refined but there's an astonishing amount of things in the open source world to aid a software developer. So much so that I'd never long for Windows on a BBB.

  • Google top honchos are strategic masters (Score:5, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Saturday February 22, 2014 @03:24PM (#46312135) Journal
    I can only marvel at Google at its strategic moves. Sun tried to fight Microsoft with Java and got clobbered. Google rightly realized as long as MSOffice is delivering cash like a firehose, it would be impossible to fight it. It went on a long term plan with bare mininal Google Docs, then with Google apps to pinch the money supply. It leveraged the connectivity by making collaboration front and center of office tools. Microsoft did not reduce price fast enough, or introduce network features fast enough. They were resting in laurels and now MsOffice monopoly does not look as monolithic as it did when we were discussing the ODF vs OOXML fights.

    It participated in the spectrum auction and made the telcos pay near market rates. It bought dark strands of the fiber network after the market crash to protect itself from local last mile ISPs from holding it for ransom.

    It talked to WhatsApp, made an offer of 10 billion with lots of poison pills. It set the floor at 10 billion, leaving all the smaller players aside. It knew Facebook was despo and will buy WhatsApp, but it boosted the price and made Facebook pay dearlym 35% of cash on hand!. Please disregard the 19 billion dollar figure. That is based on overpriced FB stock price. That Facebook will be strapped for money in the coming year for other aquisitions is the key victory for Google.

    WhatsApp's 450 million users includes millions who create new accounts every year when their old free for the first year accounts expire. Those users are penny, nay, paisa pinchers who use WhatsApp to avoid international texting charges between India and the Gulf countries and Singapore. They use WhatsApp to broadcast their texts to N recipients paying 1 outgoing text charge. In India incoming calls and texts must be free by law. Only the sender pays. 2 dollar per user? You can't chisel 2 rupees out of them. Anyway WhatsApp has no advantage when it comes to smartphones. Its explosive growth was due to it being the portal to the intenet for dumb phones via SMS. That market is done.

    Unorganized linux tried to scare Microsoft with netbooks. Microsoft hit back and evenutally killed the netbooks market, though it had to extend XP's life to do so. But Google resurrected the netbooks markets, and is forcing Microsoft to engage in price war again. Given the drop dead simplicity of the Chromebook, and low cost by eschewing the bells and whistles of the tablet market, it is very difficult to see anyone make any serious money off them. But it hampers the others from raising their profit margins.

    Google plays the strategic game stupendously well.

    • Google plays the strategic game stupendously well.

      Google TV, Buzz, Google+, Nexus Q, Google Wave... etc. etc.
      And ads are still 90%+ of the business...

      You should try a career at revisionist history.

      • Re: (Score:2)

        by tomhath ( 637240 )

        Google TV, Buzz, Google+, Nexus Q, Google Wave... etc. etc.

        And ads are still 90%+ of the business...

        They don't hit a home run every time they swing the bat, nor did Steve Jobs, Scott McNealy, or Steve Ballmer. But Google knows when to cut their losses and move on; Jobs was also very good at that, McNealy and Ballmer not so much. It's too early to tell with Zuckerburg, but the GP presents a good argument that he's in the process of blowing it.

      • Re: (Score:2)

        by Uberbah ( 647458 )

        You should try a career at revisionist history.

        I see you've established a career in missing the point. First, the list of dropped Google products is a non sequitur when talking about Google's strategies against its rivals. It's like dismissing Apple's iOS moves because they stopped making the Cube years ago. Second, Google not caring about making a big profit on a product can be a feature, not a bug, if doing so cuts their rivals off at their knees. Like the aforementioned examples of Chromebooks and Go

        • How is Microsoft a Rival though? They absolutely dominate the ad market. Microsoft has almost no presence in the ad market. Chromebooks are a novel experiment but I don't see them threatening Microsoft in the slightest. After all you can run Chrome on a Windows 8 device (for $15 now even).

          I see GoogleDocs as an effort to grab some stragglers but it doesn't seem to be a big money maker or a large enough investment on Google's part to warrant Microsoft's attention. After all the Office division is sti

    • Some of what you write is true, the rest pure bollocks!
      Whatsapp does not work on most feature phones - the Nokia Asha series is an exception. Its used primarily on Smartphones - even in India. On a Smartphone there is no reason to text message...that part is true.
      Heavy text message users - in India and other countries - still use text messages. A basic 2G/3G package will cost Rs 100 a month - plus the added cost of the smart phone - for most users.

  • And I've never seen anything worth paying them for.

    Except maybe Windows FLP, which is not for sale for any price to anyone not having corporate licenses and its use is discouraged by Microsoft. Windows Embedded 8 is a fucking pig and is fucking useless. It's within 5 percent of the size of a full version of 7 or 8 and all of the resource use as a full version of 7 or 8.x. Why bother?

    "Small devices?" According to who? Microsoft's idea of a small device isn't anyone else's that I know of.

    Sure, I'll take

  • Not to question Microsoft's business model, but why are they doing this. Windows is their core product. Everything they do is based on people buying windows and then office. This is ".com" logic, where they take a profitable product and then make a business model that is cheaper and makes no money. I don't use Microsoft products unless I have to, but this is not a recipe for success. Why don't they make something that people want? Is this a way to inflate license sales of windows 8 to consumer goods because
  • ...to test the Windows performance of Java programs I write on Linux.

  • Surprised... (Score:3)

    by QuietLagoon ( 813062 ) on Saturday February 22, 2014 @04:15PM (#46312353)
    I was surprised that Microsoft was charging $50 per copy to the OEMs. That's quite expensive.

  • Stop being assholes.

    $15.00 across the board, you want fater adoption, let us at home pay $15 for it. Because at that price point, I'll give it another shot, hell I'll even tolerate some of the issues at that price point.

    At $199 no way in hell.

  • Required load (Score:3)

    by symbolset ( 646467 ) * on Saturday February 22, 2014 @04:41PM (#46312491) Journal
    Still comes with a horridly insecure browser integrated into the OS that is incompatible with their previous browsers and enterprise web apps and cannot be removed. Still prohibits preinstall of alternative browsers, search engines. Still prefers Outlook.com sign in. Is still Windows. Seems like they still have a few issues to work through.

  • Did the same thing with Netbooks (Score:5, Insightful)

    by rahvin112 ( 446269 ) on Saturday February 22, 2014 @08:44PM (#46313573)

    They did the same with netbooks. Discounted to $15, then used the $15 price to force the OEM to reduce the specs. Once they got the specs to the point of garbage and sales started to drop off they raised the price a bit, rinse and repeat until the entire market is gone. That's what happened to netbooks, incredibly popular until MS deliberately destroyed the hardware requirements so that no on wanted them anymore. Everyone that bought a netbook and hated it? That was Microsoft ensuring they were underpowered pieces of garbage.

    The best tricks are the old tricks.

    • This time it's not "netbooks", it's "Chromebooks". While that does not make any difference at all, MS can't use the name "Chromebook", and can't confuse people about what they are buying.

      This time, all that MS will get is another "Windows products are the worst available", like they got in phones and tablets.

      • Their goal is to prevent the sale of the chromebook by flooding the market with cheap windows imitations.

        Yea I agree it might not work but like I said, the old tricks are the best tricks.

  • One of the key purposes of Windows 8 was to start raising hardware requirements. Laptops under $250 shouldn't be part of the Windows ecosystem, they shouldn't exist. Microsoft should be glad to lose them. This price cut is going to give a huge advantage to devices under $250 and create a void between $250-400. Bad, bad inconsistent.... If anything they should be doing the opposite. Make Window 8 $150 on cheap devices and maybe free or even subsidize expensive devices. They need to drive their custome

  • When you have a monopoly, you can hold prices high, and that means that you provide 1 purchase and 5 pirate copies.
    When the price is reasonable $15.00, users would rather pay, than pirate. It is an affordable rate. Perhaps that will result in a 1 to 2 ration instead of a 1 to 5 ratio.

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