Cheap tablets and laptops: that's what has been the theme during the past few weeks as various vendors have been announcing Windows tablets of the 8in variety that all cost well under $200. The reason this is happening now, and not 12 months ago, is that Microsoft has made Windows free for devices under 9 inches for OEMs, and these products are the result of the price cut.
Microsoft made the move to cut the price of Windows to combat Android at the entry level of the market. Prior to the price cut, Windows was unable to compete on price points, and Android exploded at the entry level prices. So Microsoft reacted, cut the price, and now has a plethora of products from various OEMs running Windows which are heading out to retail shelves very soon.
The devices that are coming out are purely designed for value, but at least they run Intel chips under the glass, which means that performance should be acceptable. Of course, expect low resolution displays, low storage amounts, and plastic everywhere. Considering that they are all under $200, these are nearly disposable tablets compared to the more expensive counterparts like the Surface 2 and iPads.
But how is Microsoft helping to differentiate its devices from those with a Google OS? Office. It's fair to say that the Google Play store is more mature and has better apps than the Windows counterpart, but Microsoft is tossing in a year of Office 365 Personal with many of these entry level devices.
As we have seen today, with these entry level devices, you are given a year free of Office 365 Personal which gets you the Office suite on your tablet and one PC. Not to mention that you also get 1TB of OneDrive space too. By bundling the two together, Microsoft is giving you $84 (at the monthly price, cheaper options can be found elsewhere) worth of software for a year to use when you buy one of these low end tablets.
Microsoft and its OEM partners will need to market this freebie quite clearly about the added value that this brings to these products if they hope to sway users back to Windows from Android. In some instances, vendors are selling the exact same device with both Windows and Android, so in this case, the addition of Office 365 for one year does make for a good value.
This isn't the first time we have seen Microsoft use Office to discourage using a competitors product. When you buy any subscription to Office 365, you get 1TB free of OneDrive storage. Dropbox, a primary competitor of OneDrive, charges $99 for 1TB of storage but you don't get Office (obviously). Considering that Office 365 starts as cheap as $48 for a one year subscription, it does not make any sense to pay for Dropbox.
We will be curious to see if Microsoft brings this strategy over to its Chromebook competitors, like the HP Stream, that will be launching later this year.