Windows 8 Pricing
Well, apparently Microsoft has set the price for Windows 8. Coming in at $70 this is considerably less than Microsoft sold Windows for in the past. Though, myself, and I think everyone else expected the price to be lower than with prior versions. I'll have to go digging for my earlier post and see if this lines up with my predictions. Though off the top of my head, I think I would have expected it to cost more than this.
I'm wondering if this is a promotional price. Of interest is the fact that there are 2 options in the Windows Store, Windows 8 Pro and Windows 8 Pro Pack. The "Pack" version includes Media Center and costs the same as the non Pack version. One would expect a version that contained more would also cost more. Also, this is getting closer to where people pegged OEM prices. If this is the final retail price of the OS, they will likely need to offer it even cheaper to OEM's than they do today, which would be good news to consumers as there would be more wiggle room for competitive pricing, but bad for Microsoft. Microsoft gets most of its money for Windows from OEM licensing deals today.
However, with the recent announcement that they are no longer just a Software company, maybe they will be will planning to cut the OEM price as well.
Personally, if you assume that the $70 price tag is final, then I think Microsoft either didn't cut it enough or cut it too much depending on how you look at it. On the one hand, the price is less than half of what prior versions sold for which means that they would need to more than double the sales of the retail version to make up for the smaller margins. That seems unlikely to me, so they probably should not have cut it as deep. On the other hand, if they are truly trying to get behind the Application Store and services revenue ... then they simply want to sell as many copies as possible, regardless of margin. And for that I think it is too high a price.
This price sounds like a way of dipping their toes in the water. If the Windows Store is smashing success, than I expect the price could stay here to help move units (they are unlikely to go lower at this point), but if it doesn't get instant traction, I expect the price to go up in January when the discounted upgrade offers end.
I'm wondering if this is a promotional price. Of interest is the fact that there are 2 options in the Windows Store, Windows 8 Pro and Windows 8 Pro Pack. The "Pack" version includes Media Center and costs the same as the non Pack version. One would expect a version that contained more would also cost more. Also, this is getting closer to where people pegged OEM prices. If this is the final retail price of the OS, they will likely need to offer it even cheaper to OEM's than they do today, which would be good news to consumers as there would be more wiggle room for competitive pricing, but bad for Microsoft. Microsoft gets most of its money for Windows from OEM licensing deals today.
However, with the recent announcement that they are no longer just a Software company, maybe they will be will planning to cut the OEM price as well.
Personally, if you assume that the $70 price tag is final, then I think Microsoft either didn't cut it enough or cut it too much depending on how you look at it. On the one hand, the price is less than half of what prior versions sold for which means that they would need to more than double the sales of the retail version to make up for the smaller margins. That seems unlikely to me, so they probably should not have cut it as deep. On the other hand, if they are truly trying to get behind the Application Store and services revenue ... then they simply want to sell as many copies as possible, regardless of margin. And for that I think it is too high a price.
This price sounds like a way of dipping their toes in the water. If the Windows Store is smashing success, than I expect the price could stay here to help move units (they are unlikely to go lower at this point), but if it doesn't get instant traction, I expect the price to go up in January when the discounted upgrade offers end.
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