Microsoft gearing up for price war

Microsoft gearing up for price war

Good news for consumers as the prices of Windows mobiles and tablets will dip below $200 this year, as opposed to last year when they reached up to $500.The announcement comes as Microsoft shifts its focus to the prices of its devices in a bid to remain aggressive within the market.

Nick Parker, Microsoft’s vice president of OEM has said the company is working with partners to reach price points that are 'very industry competitive' for 7, 8 and 10-inch devices. He added that tablets and smartphones running Microsoft’s software last year 'were in the 3s, 4s, 500 dollars - this year, we’ll be 1s, 2s, 3s'. In some cases this would mean price reductions of over 40%. 'They will really surprise you,' Parker added. The comments were made to reporters after his keynote at Computex, Asia’s largest computing show.

In a market that is dominated by Google, which offers its Android operating system for free to handset developers, Microsoft will now follow suit by offering its Windows for free to devices smaller than 9 inches. By reducing prices down to around the $200 mark, Microsoft is bringing its products into line with the price of devices that run on Android. 

Currently Windows only powers less than 4 percent of smartphones globally, while Android powers 78 percent and iOS 17.6 percent. Parker would not reveal if the free offering was temporary or if it would run indefinitely. Microsoft is intent on decreasing this margin not only by reaching out to new manufacturing partners, but through the relaxation of certification requirements for mobile devices.

At Computex, Parker emphasised that Microsoft had other ways to garner sales and increase market share, such as the 'freemium' model of its Skype video chat service and the launch of Office 365, which allows users to rent the software for a year instead of buying it. Microsoft is also preparing to jump into the wearables market with the release of a smartwatch and is ready to add Kinect to its devices.

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