Microsoft cuts Windows licensing costs for OEMs


The Acer Iconia W3 makes use of recent Windows 8 license cost cuts for small tablets

Nick Parker, head of Microsoft's OEM division, confirmed at Computex that Microsoft has cut the licensing fees for both Windows 8 and Windows RT tablets, but only for those with small screens. The idea is that by cutting the cost of Windows in 7- to 9-inch tablets, these devices can sell for less and potentially draw in more sales.

Despite the cuts for small Windows 8 and Windows RT tablets, Microsoft has not cut the licensing costs for tablets with 10.1-inch displays or larger, and the company didn't detail exactly how much OEMs would be saving. The Wall Street Journal previously reported that licensing costs would be slashed by up to 75% from an original price of $120, but this still remains unconfirmed.

Microsoft is also increasing the value proposition of smaller Windows 8 tablets by chucking in a free copy of Office 2013 Home & Student, which will include Word, Excel, PowerPoint and OneNote right out of the box. The reduction in licensing costs and bundling of Office can already be seen in the Acer Iconia W3, which is the first 8-inch Windows tablet available on the market; it will cost $379 when it goes on sale at the end of the month.

Although Office is now bundled and licensing costs are less, analysts don't believe that it will make much difference. Speaking to Computerworld, Moor Insights & Strategy's Patrick Moorhead said that smaller displays already means lower prices due to less expensive hardware, and that "any price reductions will be more on the basis of [this] new hardware, and not attributed to what Microsoft is doing."

Meanwhile Directions on Microsoft's Wes Miller stated that by throwing in Office for free it's "an incentive to those Office-heavy consumer users", but he's "not sure it's going to encourage the sale of smaller [Windows] tablets." Both analysts agree that Microsoft needs to get more high quality apps in the Windows Store, which in turn will provide more reasons to buy a Windows tablet.

Source: Computerworld

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Business Rule 1: When your product start failing and have people resenting with your product:

Cut the Price, Give it cheap, dirt cheap. Oh wait, I have seen this strategy before.....HP Palm LOL.. Here comes MS with its flop win 8 product. Putting Bicycle tire in Truck is called innovation at Microsoft and the gimmick name is unification.

It was overpriced to begin with. See, the market really does work. Economics 101. Supply and demand.

Of course I could be a real negative Nancy and say this move reeks of desperation, along with the inclusion of Office in these low-priced tablets. Honestly, I think Microsoft is crapping bricks because Windows 8 has been so polarizing. Most people seem to really love it or really hate it.

I don't think there's anything surprising about all of the debate. The people behind Metro are also the same people behind the ribbon in Office and that was met with a similar about of negative vocal response. Good or bad, lots of people simply don't like change.

I'm not sure what exactly the license cost is for Win 8 x86. For RT, its $90. I think it's ironic that they are bundling Office w/ small tablets, when, it would be better to just bundle it with bigger tablets, since they would be more fit to run Office (w/ their bigger screens)

I think if MS were serious about penetrating the tablet market, they would have given away the RT license for free and charged a lot less for Win 8 x86 on tablet devices. It's kind of hard to come out w/ a 7in tablet for $380 when the Nexus 7/ipad mini are both cheaper by at least $50.

I know the Acer tablet runs full Windows, but it is an atom chip. The real price-gouging comes from Intel.

I bet the cost of 8 on these devices is very close to what some of these companies are paying Microsoft to use Android. And where did that $120 number come from? There's no way that OEMs are paying that for a Windows license.

now why does this sounded incredibly familiar to _any_ and _all_ microsoft flops for the past 30 years. lmao.

"any price reductions will be more on the basis of [this] new hardware, and not attributed to what Microsoft is doing."

Really? You don't think cutting the price of Windows by 75% ($90) is going to help decrease the price of these tablets? I am pretty sure that this Acer tablet would not be $380 if Windows cost $90 more.

This is actually to be expected, Windows 8 has fail to reach the target (as many of us told them it would) so now they want to “sell more” so the people that buys the PC now gets a free upgrade to SP1 (yeah I call it SP1). As someone that can get OEM copies of Windows I don't really see the big difference.

People with normal $300 dollar pc with a normal desktop form factor without touchscreens hate Windows 8.

In fact they like Vista more than Windows 8, since they saw that Vista included Movie Maker, DVD Maker, Mail, Calendar, p2p, etc….

I just hope they don't pull a metro start button or else nothing would have changed.

Speak for yourself - I run Windows 8 on a desktop (and even use a pair of ModernUI apps as defaults - MetroIRC and MetroTwit) without a quibble. I game on it also without a quibble.

not my self, lets do something simple... open internet options without opening IE or control panel.

in Windows 7 or Vista, you just press start and type Int op and you are there.
in Windows 8 you go to start an type int op then click on settings and you are there...
in Windows 8 SP1 you do the same as in Windows 7 and Vista.

Windows 8 was just bad, instead of 2 clicks you end up with 3 or 4.

as someone that has to guide non-tech users remotely i can say that Windows 8 made things harder.

Dude, they screwed Search on Windows 8 since that screen you have is what Vista and 7 had even when they were in beta stages.

PGHammer said,
Speak for yourself - I run Windows 8 on a desktop (and even use a pair of ModernUI apps as defaults - MetroIRC and MetroTwit) without a quibble. I game on it also without a quibble.

Do you have a quibble with Tribbles?

Sorry for the lame Star Trek reference. I am beyond tired at the moment.

I just managed to do that in Windows 8 with 1 click.

SaT.161 said,
not my self, lets do something simple... open internet options without opening IE or control panel.

in Windows 7 or Vista, you just press start and type Int op and you are there.
in Windows 8 you go to start an type int op then click on settings and you are there...
in Windows 8 SP1 you do the same as in Windows 7 and Vista.

Windows 8 was just bad, instead of 2 clicks you end up with 3 or 4.

as someone that has to guide non-tech users remotely i can say that Windows 8 made things harder.

Hello,

A good move on Microsoft's part. This should allow them to more easily compete with devices like the Google Nexus 7 and Apple iPad Mini.

Regards,

Aryeh Goretsky

Really they should shift to a percentage of sale price licensing. The flat rate pricing makes it more difficult to built low end devices. Just basing it on screen size isn't really enough because you can have a high end device with a small screen.

Further confirmation that Windows-8 with its UI was designed primarily for tablets. As for laptops and desktops, hardly, at least for content creators.

TsarNikky said,
Further confirmation that Windows-8 with its UI was designed primarily for tablets. As for laptops and desktops, hardly, at least for content creators.

How does this comment relate to the article in any way?

It's confirmation that Microsoft now wants to encourage smaller tablets. It suggests previous Windows licensing fees would keep these tablets' prices needlessly high. It says little if anything about how Windows 8 and its UI were designed.

Especially since he's flat-out wrong. His comment is purely subjective and has to do with his hatred of Windows escaping the box he is trying to keep it in. What is it with folks continually trying to keep Windows (and Windows NT-based OSes in particular) in a box/niche?

So what if it was mostly for tablets etc? It is pretty damn easy to make it work like Win7... not enough to really complain about.

TsarNikky said,
Further confirmation that Windows-8 with its UI was designed primarily for tablets. As for laptops and desktops, hardly, at least for content creators.

With the changes in 8.1 the UI is a thousandfold more appealing that a dumb small startmenu. That thing was so boring i stopped using it long ago. One click and the metro UI shows you all your programs needed and more. Arrangable, nice colors and little movements. How can one hate that so much is beyond me.

cetla said,
Must've been an Australian...it's depend on where you live I guess

You got a delightful sense of humour :-)