The company is reducing the price of Windows 8.1 for tablet and computer manufacturers by 70 percent, to $15, for devices that sell for less than $250, according to a report overnight by Bloomberg News, citing anonymous sources familiar with Microsoft’s program.
For computer users, the move could create what amounts to a new category of sub-$250 Windows tablets and potentially even notebooks. One big question: What will the quality be like?
It’s a key behind-the-scenes adjustment in the economics of the computer and tablet business, giving manufactures a new incentive to use Windows on low-cost machines. It comes as many of Microsoft’s longtime PC partners — including Acer, Samsung, HP, Dell, Acer and Lenovo — look to expand their lineups with new Chromebooks, low-cost machines (starting at $249) running Google’s Chrome OS.
The move is not without risk for Microsoft’s business, which has historically benefitted from sizable Windows profit margins.
This is part of a broader effort by Microsoft to shore up its relationships with computer and device makers, even as it competes with them by making its own Surface tablets (and soon smartphones, as a result of its pending Nokia acquisition). Tami Reller, the former Windows executive who now leads Microsoft’s companywide marketing, outlined a series of changes in a recent Q&A at a Goldman Sachs technology conference.
“One of the consistent themes we’ve heard from our partners loud and clear, our OEM partners in particular is take friction out of the system for us, take friction out of the system, whether it’s certification requirements, whether it’s various other programs,” Reller said. “And we’ve done that. We have listened and we have moved as fast as humanly possible to remove some of that. And a lot of that is just happening now this spring.”
The idea is “to make it easy for them to build the types of devices on Windows that they want to build and be able to deliver those devices at the price points that they want to take them to the marketplace,” she said.
Bloomberg reports that devices that qualify for the lower-cost Windows 8.1 licensing won’t be required to complete Windows logo certification or be touch compatible.