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When in doubt, slash the cost of goods...but can that help Windows 8?

One big component of the cost of PCs nowadays — especially those touchscreen notebooks, ultrabooks, and tablets most likely to play host to Windows 8 — is the fee from Microsoft for the OS license. That number may be declining soon, according to a report from Taiwanese publication DigiTimes entitled “Touchscreen notebooks to enjoy at least a 10% price cut after Windows 8 discount,” (note: I had to visit the Google cache to read the report, because the URL on the preceding link returned a 404 error). Their research indicates that touchscreen PC prices could drop by 10% whereas “some entry-level and mainstream models may even drop more than 20%.”

Although many thought no Windows could undershoot Vista, Windows 8 may change such thinking.

Though many thought no Windows could undercut Vista, Windows 8 may do so.

Will this be enough to prop up Windows 8’s lagging uptake (see Steven J Vaughan-Nichol’s excellent analysis in “Five reasons why Windows 8 has failed” on ZDNet)? Perhaps lower prices will encourage some improvements to Windows 8’s fortunes, but there’s a lot of ground to be made up (Vaughan-Nichol’s analysis shows that usage rates for Windows 8 are only just over half of Windows Vista’s at best, itself no paragon of marketing acceptance or product excellence).

To me what’s interesting about this revelation is that Microsoft is actually willing to reduce OEM licensing costs to add some momentum to Windows 8 purchases. Traditionally, their posture on pricing has been more inflexible, because OEM licensing has been and remains the primary engine for desktop operating system revenues. This testifies to Microsoft’s understanding that Windows 8 is in trouble (or at least, “failing to perform to its expectations”). Hopefully, the pricing changes will be enough to breathe more vigor into Windows 8 sales. That should make watching the sales numbers — and the corresponding usage rates (or as Net Applications calls them “market share”) over the next half year more than ordinarily interesting.

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