With the prices of low-level PCs continuing to drop into crazy-low numbers, Microsoft has cut the rate it charges PC makers for Windows. Previously the company charged about $50 for a Windows installation, but that doesn’t leave much room for profit when the whole system sells for $200.
How much the company is charging hasn’t been revealed, but it’s all part of a massive shake-up in the ways Microsoft operates under CEO Satya Nadella.
The question is, how much will Windows 10 cost when it launches in late 2015? Apple, for its part, gives away its desktop and laptop operating system, OS X. But Apple makes up the money by making the computers that run it. Microsoft does no such thing.
Might Microsoft go the Chromebook route, and begin giving it away. That’s unlikely, at least according to Microsoft COO Kevin Turner, speaking at the Credit Suisse Technology Conference last week.
“We’ve got to monetize it differently,” Turner said, referring to Windows. “It’s a very fascinating transition for us and [we’re] finding new ways to monetize the lifetime of that customer on those devices.”
Part of the slack will be picked up by subscription services like Office 365 and OneDrive. It’s all part of Microsoft’s plan, as Nadella wrote in a letter to employees earlier this year, “to enable people to thrive in this mobile-first and cloud-first world.”