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2/22/2014
11:08 AM
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Windows 8 Devices Get Cheap

Microsoft will reportedly cut Windows license fees to encourage production of sub-$250 Windows 8 devices, including non-touch PCs.

If anything has encouraged Windows 8 device sales, it's been lower prices. So Microsoft and its partners might be about to sell a lot of new PCs and tablets: Microsoft is slashing the cost of Windows 8.1 licenses for OEMs by 70%, according to a Bloomberg report published Friday evening. Citing people familiar with the company's plans, the article states manufacturers will pay only $15 to license the OS -- but only for devices that will retail for less than $250. The program reportedly aims to combat Chromebooks, which have eaten into Windows sales at the low end of the market.

In response to an inquiry about the report, a Microsoft spokesperson told InformationWeek, "We have nothing to share."

[ Are you feeling the Windows XP fury? Read Windows XP Shutdown Outage: Users Boo Microsoft Blog. ]

Friday's report isn't the first indication that Microsoft is modifying license costs in order to stimulate Windows 8 adoption. Last March, The Wall Street Journal and the Taiwanese tech website DigiTimes independently reported that Microsoft had cut OS and Office license costs to stimulate production of smaller Windows 8 tablets.

The company never confirmed those claims, but products that have since hit the market support the narrative. After sticking with prohibitively expensive price points for the first half of 2013, OEMs such as Dell, Toshiba and Lenovo spent the second half touting inexpensive mini-slates that come pre-loaded with Office. Other reports from late last year claimed Microsoft might altogether eliminate license costs for Windows Phone and Windows RT.  

Many Windows 8.1 devices could soon sell for less than $250.
Many Windows 8.1 devices could soon sell for less than $250.

Microsoft announced strong quarterly results in January. As has been the case for much of the last year, however, Windows figures were tinged with troubling signs, including a 3% year-over-year revenue drop. That mark was good enough to beat 2013's historic 10% decline in PC shipments but it was also inflated by a 12% boost in revenue from the professional-oriented Windows OEM Pro -- and masked how much the consumer PC market has unraveled.

Microsoft also recently announced it had sold more than 200 million Windows 8 licenses -- a large number, but also one that trails Windows 7's precedent by a significant margin. Windows 8 and 8.1 accounted for less than 11% of desktop users in January, finishing third behind Windows 7's 47.5% and Windows XP's 29.2%.  Win 8 also remains a niche player on the tablet scene, where iPads and Android tablets control most of the market. Apple's tablets have carved out particular dominance within the enterprise

It's noteworthy that the new program allegedly targets Chromebooks. Microsoft's Windows 8 ads have taken swipes mostly at Apple's iPad, but as the low-cost Chromebooks have become popular in industries such as education, Microsoft has switched tactics. Andrew Waber, an analyst with online ad network Chitika, told InformationWeek's Thomas Claburn that Chrome OS could become more popular in the enterprise thanks to Google's recent pact with VMware to offer virtualized Windows desktops on Chromebooks.

Chromebooks now come in a variety of form factors, such as LG's Chromebase, an all-in-one desktop.
Chromebooks now come in a variety of form factors, such as LG's Chromebase, an all-in-one desktop.

Also noteworthy: Whereas Microsoft allegedly cut license costs last year to promote tablet growth, the new program reportedly applies to any device under $250 -- including PCs and laptops without touchscreens.  

As such, the reduced license fees tie neatly into recent reports that Microsoft wants to re-engage its longtime PC users, many of whom grew disenchanted with Windows 8's more radical UI departures from previous versions. Microsoft's efforts are expected to include an update to Windows 8.1 that could arrive by April and make the touch-oriented OS more palatable to mouse-and-keyboard users.

With various leaked builds circulating online, the update appears imminent. It includes more refined integration between the Modern and desktop interfaces, including Live Tiles that respond better to mouse commands, and the ability to pin Windows Store apps to the desktop's taskbar. The update will also allegedly recognize the type of hardware on which it is installed and adjust accordingly; it is expected to boot to the desktop by default on non-touch hardware, for example, and to continue booting to the Modern UI on touch-equipped devices.

Forrester analyst David Johnson told us last week that the update sounds promising. "They have two operating regimes," he said, "and they are learning that it's not a good strategy to sacrifice one to make the other better."

Still, the upcoming update is not expected to reintegrate Windows 7's Start Menu, the absence of which has upset some users. According to various reports, the Start Menu, as well as the ability to run Modern apps in windows on the desktop, will debut in Windows 9 in 2015

Will users wait until 2015 for a feature that's been in other Windows versions for years? Johnson said Microsoft might be moving slowly and deliberately in order to avoid the perception it has made a mistake. "If they try to move too quickly, it could undermine confidence in the Modern UI, which they need to be committed to," he said.

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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Gary_EL
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Gary_EL,
User Rank: Ninja
2/24/2014 | 12:45:21 AM
Re: CRAP IS CRAP, EVEN IF IT'S FREE
The whole Windows 8(.1) experience might be summed up as: "Microsoft gave a party, but nobody came." It's a product with no market and a solution where there was no problem. I admire them for trying, for sticking with it as long as it long as they did, and essentially giving up before it was too late. The problem is that there was nothing wrong with XP to begin with.
PaulS681
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PaulS681,
User Rank: Ninja
2/23/2014 | 5:53:06 PM
Re: CRAP IS CRAP, EVEN IF IT'S FREE
@Anon... Have you looked at 8.1 yet?  I have it on my laptop which basically is my desktop. I have it configured so it looks and acts just like windows 7. You can avoid all that metro UI "junk" if you don't like it. I would agree with you that windows 8 wasn't meant for a desktop but they have corrected some things in windows 8.1.
PaulS681
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PaulS681,
User Rank: Ninja
2/23/2014 | 5:47:46 PM
Vmware deal

If MS spins it right that can make money off vmware's deal with the chromebook. Running windows as a virtual machine on a chromebook will still require a windows license. I do like they are lowing the cost for OEM licenses on devices less than $250.

PaulS681
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PaulS681,
User Rank: Ninja
2/23/2014 | 5:40:25 PM
Re: CRAP IS CRAP, EVEN IF IT'S FREE

I would hardly call MS windows 8 crap. You can dislike some or all of the features but it's far from crap. What might give your post a little credibility is if you can explain why you think its crap. A comment that simply says Crap is crap with no backing is crap itself I'm afraid. I just upgraded my laptop to 8.1 and I'm surprised at how much I like it. I have made it look like windows 7 but its still windows 8.

danielcawrey
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danielcawrey,
User Rank: Ninja
2/22/2014 | 6:57:12 PM
Re: CRAP IS CRAP, EVEN IF IT'S FREE
I don't think that Microsoft has lost it, but they do need to continue to think differently about their licensing model. Think about it: although Chromebooks are becoming popular, even this article discussed that VMWare deal where Chromebooks can have Windows VMs running. 

People are going to continue to use Windows, it just depends how Microsoft is able to monetize it going forward. 
Stratustician
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Stratustician,
User Rank: Ninja
2/22/2014 | 2:09:29 PM
Re: CRAP IS CRAP, EVEN IF IT'S FREE
I'll back you up here.  I have devices on just about every platform, and which ones do I use the most?  My windows 8 devices.  iPads are great consumption devices in that they play games beautifully, are intuitive and have great apps.  But that's really it.  I love the fact that my Windows 8 device runs both apps (granted they do need to beef up their app catalogue) but it also allows me to do actual productive things on the device and use it like a proper laptop.  This means when my laptop dies a horrible death, I'll be less likely to replace it since I have a full-fledged laptop/tablet hybrid that can do anything a laptop needs to do.  
mrazpv
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50%
mrazpv,
User Rank: Apprentice
2/22/2014 | 12:25:39 PM
Re: CRAP IS CRAP, EVEN IF IT'S FREE
Just come out and say it, your a no-brain Apple loving zombie.    So obvious you have not tried the windows 7 or 8 platform.  My wife has an ipad I have a windows tablet.  No comparison, if you want to do "real" work ie, word, powerpoint, or excel the windows tablet is far superior.  If you want to update your facebook or play candy crush or some other mindless game, the ipad is great for that. I know so many people that regret there ipad purchase, its an overpriced toy.
anon1906250919
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50%
anon1906250919,
User Rank: Apprentice
2/22/2014 | 12:23:38 PM
Re: CRAP IS CRAP, EVEN IF IT'S FREE
I have to agree with John, MS has lost it big time.  They keep pushing crazy, like Bing, Window 8, and their terrible Windows Phone.  Pushing billions at these loser products isn't going to make people buy them.  I used to be excited about the latest MS Office and their newest OS.  Now I want nothing to do with them as the UI gets worse each release.

And as far as the article about "MS need to be commited to their new UI", I think the author meant they needed to be "commited for coming up with such a lame UI".  They didn't design it for desktops, yet they are pushing it for desktop usage - CRAZY!


I really hope MS can turn it around with Windows 9, and come up with a desktop OS that is usable.  No more hidden "secret" menus, no crazy tablet or phone features for my desktop.  No touch screen requirements for my desktop - I'll never be raising my arm hundreds of times a day to smear my monitor.  I'm a developer, using MS products to develop software.  I'll never be using a tablet to do that.
JohnD985
33%
67%
JohnD985,
User Rank: Strategist
2/22/2014 | 12:03:01 PM
CRAP IS CRAP, EVEN IF IT'S FREE
I'm sorry, but Microsoft has lost it.

 

RIP
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