Microsoft is significantly dropping the Windows 8.1 license costs by 70 percent for PC makers, reports Bloomberg.
According to the report, Microsoft is planning to cut price of Windows 8.1 license from $50 to $15 for PC manufacturers retailing devices less than $250. This move is reportedly designed to combat rival low-costs tablets and Chromebooks.
Microsoft posted its biggest annual decline with dropping revenue on record last quarter, due to the strong competition from Apple as well as Google. By reducing the cost of licensing for PC makers, the company is planning to increase its market share.
Bloomberg’s unnamed yet trusted sources familiar with the programme said the discount will apply for all the products that meet the price limit of $250, with no restrictions on size or type of the device.
Sources said that while the regular cost was $50, some of the largest global computer makers paid closer to $30 after marketing incentives from Microsoft. With the discounted license fees, products will not be eligible for any such marketing support and incentives from the company.
Early this month, Microsoft’s Tami Reller reported that Microsoft has sold more than 200 million licenses of Windows 8, with a growth rate slower than Windows 7 which is related to the PC market slowdown and competitions from portable tablets that have surged in popularity.
In the last few years, global computer shipments have dropped to a great extent and the decline is likely to continue this year. Research firm Canalys predicted in November last year that tablets would account for half of all shipped PCs in 2014, with Google and Apple taking up 95 percent and Microsoft taking the remaining 5 percent of tablet shipments. This move would allow the Microsoft to tap into Google’s immense share of the tablet market.
