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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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