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Microsoft slashing Windows price to counter Google Chromebooks growth

Microsoft will slash Windows licensing fees by 70 percent
Microsoft will slash Windows licensing fees by 70 percent
Photo by Joe Raedle/Getty Images

To address losing market share to low cost devices running Android and Chrome, Bloomsberg has reported on Friday that Microsoft will slash Windows licensing fees by 70 percent on low end devices.

Referencing "people familiar with the program," Bloomberg states that Microsoft will drop the Windows 8.1 license fee of $50 to $15 on devices that retail for less than $250.

Declining Windows software sales

In their quarterly earnings report released in January, Microsoft announced revenue of $24.52 billion for the quarter ended December 31, 2013.

The good news for Microsoft was that revenue numbers exceeded analyst estimates by nearly $1 billion, due in part to increased sales in Surface tablets and Xbox One game consoles.

The bad news for Microsoft was that Windows revenue declined 3%. A company once known primarily as a software vendor, Microsoft now has the hardware side of their business picking up the slack.

Chromebooks growing widespread acceptance

As we recently reported in an article on a high tech Philly high school dumping Macs for Chromebooks, the growing widespread acceptance of Chromebooks in K–12 school districts is more than just sales hype.

Recent sales figures show that Chromebooks and Android tablets have significantly increased their overall market share, with Windows Notebooks, Apple Notebooks, and iPads, all losing market share.

Many K–12 school districts see Chromebooks not as a gimmick or gadget, but as real lower cost alternative to the Apple and Microsoft computers of the past.

Why not give it away for free?

With dropping the Windows license fee of $50 to $15 on low end devices, Microsoft is practically giving it away.

It has been suggested that Microsoft should get used to giving Windows away for free, and focusing on maintaining their brand. So far that seems to be working for Google.


What's on your mind today?

Should Microsoft give away the operating system, or continue to slash the price as they have, to maintain their dominance on the desktop, and focus on other areas?

Do you agree that giving away the operating system seems to be working for Google?

Are you wondering what is so special about the Google Chromebook?

Stay up to date on technology news, follow Tom Peracchio on the net ... The Guru 42 Blog, @Gu42 on Twitter , Guru42 on Google+ or Guru42 on Facebook

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