Manufacturers will get a huge discount on Windows licensing fees as long as their devices are available for under $250.

microsoft logo Facing threat from Chromebooks, Microsoft is cutting Windows licensing fees by 70 percent

Microsoft is slashing its Windows licensing fees by as much as 70 percent.

The proverbial sources in the known speaking to Bloomberg indicated that Microsoft will license Windows 8.1 for just $15 to manufacturers, provided that the retail value of the handset is under $250. Although a standard Windows license fee costs $50, Microsoft allured most manufacturers by offering incentives like marketing funds for their offerings. Fort the discounted fee, it has been mentioned that Microsoft would not offer any such incentives. It is believed that the form factor of the device is irrelevant, and as long as a device running Windows is available for under $250, manufacturers can get the Windows license for a discount.

The movie is to counter the rising interest in Chromebooks and Chromeboxes. There are several Chromebooks in the $200 to $300 segment that are seeing a lot if consumer interest thanks to their affordability and ease of use. The reduced licensing fees will allow manufacturers to launch devices that target Chromebooks.

Another factor that might have been a motivator was the slow adoption of Windows 8. Since its launch in October 2012, over 200 million Windows 8 licenses were sold, which is less when compared to the figures achieved by Windows 7. A reason for Windows 8’s slow start in the desktop segment was mainly due to its new user interface. The “tabletification” of the Windows UI meant that most mouse and keyboard users were uncomfortable navigating the interface. Microsoft is set to address this issue with the next update for Windows 8.1 which will load the default desktop view on non-touch based machines.

Be that as it may, last year was particularly bad for the Windows division, which posted its biggest annual decline to date. PC shipments fell by 10 percent last year, and the decline is set to continue this year as well. The discounted license fees is seen as an effort to stem the tide and entice more manufacturers to use Windows in their low-cost offerings.

Source: Bloomberg