Microsoft plans to use Windows 7 to raise netbook and PC prices

From BusinessWeek:

Of course, Ballmer also explained that the company’s goal is to raise PC prices in the next year. That’s due both to expected popularity of a new class of higher-end and higher-priced netbooks, a new pricing strategy around Windows 7 that the company hopes will result in far more upgrades to premium skus, and a reversal of a strategy in the last year to cut prices to spur demand in emerging countries. “The theory was wrong,” said Ballmer, in that Microsoft didn’t tap enough untapped demand to compensate for the price hit. “You’ll see us address the theory. We’re going to readjust those prices north” with windows 7.

http://www.businessweek.com/technology/ByteOfTheApple/blog/archives/2009/07/more_faint_prai.html

on how the Obama Administration is doing so far? Thanks.

The site isn't making it up.

I added the BusinessWeek link.

n/t

Unlike Apple they aren't in the hardware biz.

MSFT would love $199 machines ($99 laptop + $99 copy of windows 7 on it).

Between the economy, Apple, and Linux, there is negative profit in Windows PC hardware at the moment.

If a PC manufacturer goes down, guess who loses too. Microsoft.

Apple stopped gaining marketshare. 7.4%

http://www.businessinsider.com/apples-us-pc-market-share-flat-dells-sinks-2009-4

Who makes Linux computer hardware? Could it be Dell, HP, IBM, Lenovo, etc?

So if "windows" hardware rises so does "linux" hardware.

This brings us full circle.

Why would Microsoft want to raise the price of PC and thus make Windows based computers less competitive when compared to Apple computers?

And Linux users often piece their machines together, bypassing Windows all together.

Microsoft wants to copy the Apple model for Dell, HP, IBM, Lenovo...

On a personal note, I don't want Apple to "take over." Then they would start making a crappy product like most PC makers.

They doubled their market share in two years and peaked at almost 10% late last year. My guess is that with Snow Leopard and new iMacs coming out for Christmas, they will reach that territory again later in the year.

I'd rather have a reliable, well made machine than a cheap box.

Microsoft doesn't make a single cent from hardware.

Why does Microsoft care/want to beef up the profit margins for hardware companies?

What possible good could it be to Microsoft for Dell to make $500 million in profit then $400 million in profit?

Hardware companies negotiate the price of Windows with Microsoft.

Less profit means that they will want to pay Microsoft less per license.

Microsoft (in this case Bill Gates' college roommate) says, "Whoa, whoa. Let's find your profit elsewhere."

Microsoft dictates prices, take it or leave it.

If Dell dropped Microsoft Windows today what would they do? Sell Linux exclusively.

They could do that but nobody would expect them to not lose marketshare. It would be suicide for Dell to not pay Microsoft the "PC tax".

Now if Apple ever licensed OS X to third parties then there might be some negotiating power by the OEMs.

The individual PC companies need Microsoft for much the same reason as Apple hardware needs the Apple OS under the same roof.

Dell doesn't have the balls to not pay Microsoft. But in this environment when PC makers are bleeding badly, they are trying to cut their expenses.

And Microsoft, who is having their worst year ever, want to pass the cost on to consumers.

I'm done with this. If you don't believe me, talk to Bill Gates' college roommate.

He gave away the plan.

Most netbooks, for example, currently run Win Xp, a product for which MS cannot charge a premium...

Microsoft didn't see the netbook bus coming and the hardware couldn't handle Vista.

Microsoft has a netbook only version of Win7 called Starter and it will be sold only to OEM.

Microsoft strategy is not based on "premium product"

The 3 retail SKUS are:
Home Premium
Professional
Ultimate

Ultimate is not tech nerds and they will buy it regardless. Microsoft own estimation is it will make up less than 5% of sales. more expensive computers won't change that.

Professional offers the home user nothing. It is for home office users, people who own their own business/small business etc.

That leaves Home Premium. Regardless of it is a $400 bargin basement machines or $1800 high end machine it will run Home Premium in 2010.

Microsoft collects a "PC Tax" and that isn't changing. They get same profit per machine sold regardless of its selling price.

In which MS states that it indeed seeks to sell "more premium skus" (e.g. more copies of its most current software, and less of Win XP.) "SKU" doesn't mean "version of Windows 7"! :hi:

Microsoft will not longer sell ANY version of Windows XP after the launch of Windows 7. Well technically the XP on nettop grace period lasts until June 2010.

After that not a single copy of XP will be sold. So if you want to call Win7 a "premium" product compared to XP then fine 100% of sales will be a premium product after Win7 launch.

Oh wait. That was Apple.

I'll put in as many links as you had. :P

Because nobody wants to be seen carrying a Zune.

Burrows' report also noted that Ballmer laughed off the number of financial analysts in the room using Apple laptops. "We have low share in the investor community. I see a lot of Apple logos," Ballmer said. "Don’t bother to hide them. I’ve already counted them. And it’s okay, feel free (to use them), so long as you’re running Office."

Ballmer called Apple as a "fine company" doing well with a low-volume, high-price strategy, but claimed Microsoft hasn't lost market share to Apple over the past year, and that any changes in reported share numbers are just "a rounding error." Share gains by Apple "cost us nothing," Ballmer said. "Hopefully, we’ll take share back from Apple. But they still sell only 10 million PCs a year, so it’s a limited opportunity."

Windows Stores with "Gurus" instead of "Geniuses."

LOL!

Bill Gates' college roommate is in over his head as usual.

Of course, this is coming from "Apple Insider," so one might expect a biased opinion.

Unlike Apple, Microsoft doesn't make computers. So it is powerless to "raise PC prices." They can alter the licensing fee, but it contributes only $35 to the cost of a new computer.

One of Microsoft's big mistakes, besides the poorly designed and written Vista operating system, is their decision to have seven versions of Vista and Windows 7 to choose from. And with Windows 7, they will apparently offer a "free" crippleware version that "encourages upgrading." The thinking is that they can "increase market penetration" by "segmenting the market with multiple versions." This is the kind of silliness that happens when a large company like Microsoft becomes saddled with too many over-paid employees whose entire work schedule consists of having meetings to discuss plans for future meetings.

Starter is only available on netbooks (not exactly cripple ware it is more than capable given the limits of netbooks). It won't be available in stores and many netbooks don't have the hardware to use anything more than starter. Not sure where you get the idea it is crippleware or free though?

Enterprise can only be bought in volume licensing. No company considering Enterprise will be considering Windows 7 Home. No consumer will be thinking "maybe I should buy a 1000 user license for enterprise".

Home Basic is for emerging markets where consumer prices are much lower. It is not legal for sale in the US.

So the consumer has 3 choices
Home Premium
Professional
Ultimate

90% will end up with Home Premium. Professional is more oriented towards business, and ultimate towards enthusiasts.

if you pre-ordered individual copies while they were offered. If you didn't you can still buy 3 license family packs anytime for the same price per license. Even if the price for an oem install is higher than previous versions (and I doubt it will be), it will never raise to the outrageous premium Apple charges.

You can't upgrade to Windows 7 (directly) from Windows XP, and if you bought Vi$ta, then you already paid for their most expensive upgrade ever.

You are correct it requires a "clean install" but the "upgrade" pricing is available.

It is correct that windows 7 is relatively cheap compared to most upgrades.

Going from Windows XP to Windows 7 will cost you.

Upgrade Retail Price: $119 (likely will be $99 shortly after release).
Family Pack (if you have more than 1 computer to upgrade): $149 ($75 ea if you have 2 computers, $50 ea if you have 3 computers)
Pre-release (this is expired but those that pre ordered Win7 could get it for $49.

Compare this to the cost of XP or Vista upgrades and the pricing is much lower.

and try to build a quad core dual video card computer with 4GB of RAM, as well as the motherboard. Your mission is to keep the price below $500.

Can't be done- with Apple. Yet, that's precisely what I did when I rebuilt my old PC via Tiger Direct.

Getting information about Micro$oft from appleinsider.com is like getting information about Apple from Windows Magazine. This is hardly an unbiased source, given the topic.

They're going to go into the store and buy one of the 5 computers they have to choose from. All the Macs are going to be twice as expensive as the PC's so the average person is almost always going for the lower price for the mediocre product, and there's nothing wrong with that. I work for an internet company and there is nothing Mac offers me that PC doesn't at half the price.

Windows 7 is how much?

Sorry, how much is Windows 7?

Most people don't, and some of them go to zdnet and whine "Please don't install crapware on new pcs, dell and hp". Uh, crapware was put there to SUBSIDIZE COSTS.

Not to mention the technical reasons as to why windows slows down (it's far more than just fragmenting...)

Spare us your trite trope about Apple sticker prices. Anyone with half a brain would drive through that logic hole in an attosecond.

Windows 7 upgrade is $119 which is more however one can upgrade from Windows XP to Windows 7 for $119.

How many upgrades has Apple released in the same time frame?
Puma ($49), Jaguar ($49), Panther ($99), Tiger ($149), Leopard ($99), Snow Leapord ($29)

OS X has many advantages but price isn't one of them.

Ah, Vista. I love Vista.

And we thought that Windows Me was going to be the most horrendous thing to ever come out of Redmond.

Hell, I've managed to find every Windows release at least two months before the "official" release date from Windows 95 up to and including Windows 7. The ones worth keeping, I eventually bought a legit copy of (just in case Mr. Gates or Mr. Ballmer are reading this O8) )

Anybody buying a .0 release is a damn fool to begin with, buying a .0 from Microsoft makes the damn fool look damn intelligent to begin with.

Also, $29 for OS X 10.5.6 is too much a premium for you?

:nopity:

And yes $29 is too much of a premium for me, when added to the price of buying Apple hardware.

I assume that you never bought any new hardware after that.

We LOVE ours.. We've gotten TWO from this place..

http://hcditrading.com/


Dell Refurbished Laptop Notebook Computers



C640 | D400 | D410 | D420 | D505

D510 | D520 | D600 | D610 | D620

D800 | D810 | D820 | X300 | M20 | M70 1600 MC | I6000 | I6400 | I9100 | I9300

Single Units Starting at $249.95