Much has been said recently about the success (or lack) of Windows® 8. I addressed it here in December, citing that Windows® 8 is not meant to immediately replace Windows® 7, but rather to offer a version of Windows® that can take advantage of touch screen devices. The challenge is that the majority of touch devices are tablets, many of which sell for less than $500. OEMs are reluctant or unable to license Windows® on these lower end devices because the Windows® royalty represents a very significant percentage of the selling price.
On March 5, the Wall Street Journal® reported that Microsoft® is slashing prices to OEMs developing touch enabled devices. Since that time there have been other unofficial reports of discounting but most of them cite the WSJ as their source.
Microsoft® is neither confirming nor denying the rumors. The discounts may be as much as 75% and apply to relatively small devices with a screen size less than 10.8 inches. Such a dramatic discount seems somewhat unlikely, but if only applies to lower end systems it would certainly help MS penetrate that segment of the market where they have virtually no presence today.
The speculation also includes bundling Windows® 8 and Office® 2013 for the applicable devices. This could be a very good move for MS®. The devices under consideration are more likely to be used for consumption than productivity, so it’s unlikely most users would purchase Office® if it weren’t preinstalled, but if it’s already on the device the user would be more likely to use Office® than a document viewer obtained elsewhere. Including Office® would also enhance the perceived (and true) value at purchase since most users recognize the retail value of the suite and benefits of compatibility with home and office environments.
Finally, if Microsoft® aggressively pursues the lesser priced market segment, they may be able to convince some of their key OEMs to standardize on an all-Microsoft® platform. Today, Acer®, Asus®, Lenovo®, Samsung®, and others offer Windows® 8 on their high end devices and Android® or something else on the lower.
I’m hoping the rumors are true since Microsoft® has a lot riding on the success of Windows® 8. We don’t know if sales to date are in line with internal projections, but they have fallen short of the expectations of many industry watchers and the negative media coverage has not been good for Microsoft®.