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Microsoft to Cut Windows Licensing Price by 70% to Compete with Apple

Microsoft is set to cut pricing of Windows 8.1 by 70 percent for computer and tablet manufacturers, according to Bloomberg, partly due to increased competition from both Apple and Google in the PC space.

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Stronger competition from Apple Inc. (AAPL) 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. By offering incentives for PC makers to sell cheaper models, Microsoft may be able to increase its share of the growing $80 billion tablet market and stave off Chromebooks, notebooks that run Google’s operating system.
Under the new terms, manufacturers will be charged $15 for Windows 8 licenses to preinstall it on devices that retail for less than $250. Previously, the fee was $50, although many manufacturers were able to pay $30 because of incentives provided by Microsoft.

The software company said last month that Windows 8 adoption was moving at a slower pace than Windows 7. Over the past several years, notebook and desktop PC sales have declined as lighter, more portable tablets have surged in popularity -- an area that, so far, Google and Apple have dominated.

In recent years, Apple has been the top vendor in the PC market, selling more combined tablets, notebooks and desktops than any other manufacturer. Research firm Canalys predicted that tablets would account for half of all shipped PCs in 2014, with Apple taking up 30 percent of tablet shipments, Google's Android taking up 65 percent of tablet shipments and Microsoft taking up 5 percent of tablet shipments.

Top Rated Comments

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27 weeks ago
What happens to a software company that can't sell software?
Rating: 55 Votes
27 weeks ago
Steve Ballmer would never let this happen. :p
Rating: 49 Votes
27 weeks ago

70% off isn't free...


And it doesn't have to be free. If Microsoft wants to charge for their software/OS, then so be it. They make money primarily off software; Apple's main revenue stream is hardware.
Rating: 26 Votes
27 weeks ago
70% off isn't free...
Rating: 21 Votes
27 weeks ago
It's a terrible time for Microsoft.

Google sells ads and makes money from it.

Apple sells hardware to make money

They both give the software free.

How Microsoft will make money from its software if competitors are giving away free.

Ouch! A terrible paradigm shift.
Rating: 17 Votes
27 weeks ago
Most people don't want windows 8 and prefer windows 7, this is the true reason why they slashed prices, many pc makers have recently brought back computers with windows 7 pre-installed due to the demand for it.
Rating: 17 Votes
27 weeks ago
Still overpriced. It's not even worth a $1 compared to OS X. My Wndows days are happily behind me.

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What happens to a software company that can't sell software?


The do make pretty nice mice :)
Rating: 17 Votes
27 weeks ago
The new guy's first action is to rearrange the deck chairs on the Titantic?

;)
Rating: 12 Votes
27 weeks ago
It says on computers and tablets selling for under $250. Not a very large percentage of devices, i'd imagine.
Rating: 8 Votes
27 weeks ago
Reading these posts make me cringe!!

Nothing special about OS X or Windows 8, both have issues.

Go to Macrumors or equivalent windows forum, get the answer to your issue, and get back to using your computer to get real work done.
Rating: 7 Votes

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