Windows 8.1's problems go deeper than its price

A single Bloomberg report quoting unnamed Microsoft sources and suddenly the Internet is awash with headlines telling us that PC vendors will now be charged only $15 (£9) to load Windows 8.1 on any system costing $250 or less.

The ‘usual’ license fee is said to be $50, which appears to cut device makers a good enough deal to make them think twice about developing Google’s annoyingly low-cost Chromebooks that are rapidly taking over this end of the market.

The problem with this giveaway is that the same Bloomberg story admits that the large vendors don’t pay anything like $50 in the first place. Vendors already getting some kind of concession won’t qualify for support under any new scheme.

So Microsoft is cutting the price of Windows for vendors despite the fact that the volume PC vendors that matter already get a cut price. This isn’t going to make the slightest difference to Chromebook makers because they can use Google’s operating system for nothing and the prices of Google devices are still falling. For example, the forthcoming Asus Chromebox is said to start at around $179. In the UK, Microsoft charges consumers almost that much just to buy a box copy of Windows.

Microsoft’s move looks like an attempt to get vendors to make more Windows 8.1 tablets, not more cheap PCs.
The problem with the Chromebook hypothesis is that it isn’t simply their cheapness that is causing Windows problems, it’s their simplicity and security. This is why US schools are buying them by the bucket-load.

To fight back, Microsoft needs to invent a web-oriented computer with verified boot and a minimal footprint and do so on a license-free basis. That seems unlikely because Microsoft has convinced itself that a single all-purpose OS is the right way to serve consumers.

It’s unlikely to be a misjudgement as serious as the Windows Mobile debacle but the firm should at ponder whether web apps don't undermine the one size fits all philosophy.