Microsoft said Tuesday that it is has opened up its $14.99 Windows 8 upgrade offer to the general public, while online reports suggest that Windows 8’s full retail price will be lower than previous versions of the operation system.
In a blog post, Microsoft said it had opened its upgrade program, which will allow users who have recently purchased a Windows 7 PC to upgrade to Windows 8 Pro for just $14.99. The upgrade offer expires on Feb. 28, 2013.
Under the program, announced in May, users who purchased a new Windows 7 machine after June 2 can upgrade to Windows 8. Users will need to visit the Microsoft upgrade site, register for the upgrade and supply their 25-character product key. On Oct. 26, Microsoft will begin sending out promotional codes. Customers can then upgrade to Windows 8 Pro via the Microsoft Upgrade Assistant, using the promotional codes to lower the $39.99 upgrade cost to $14.99.
Meanwhile, The Verge reported Tuesday that - according to “one source familiar with Microsoft’s plans” - the company will initially price the boxed version of Windows 8 at $69.99, increasing to $199 after Jan. 31. Upgrading Windows 8 to Windows 8 Professional will also cost $69.99, then $99.99 after the discount period.
To recap, here’s a quick breakdown of what we know of the pricing for Windows 8:
- If you have an older Windows XP, Vista, or Windows 7 machine, you can upgrade to Windows 8 Professional for $39.99.
- If you purchased a new Windows 7 PC between June 2nd and January 31st, 2013, you’ll pay $14.99 for Windows 8 Professional.
- According to sources, Microsoft will price Windows 8 retail copies at $69.99. That price will increase to $199 on Jan. 31, 2013.
- Windows 8 Pro will also cost $69.99 at retail, and will serve as an upgrade to Windows 8 Pro for those with the standard Windows 8 systems. After Jan. 31, the price will increase to $99.99.
Microsoft has yet to announce the price for a “System Builder” edition of Windows 8 - designed to let small businesses build Windows machines for clients - which has traditionally been cheaper than other versions. However, Microsoft’s license terms now explicitly support do-it-yourself or home-built PCs, as long as buyers use the OS on only one machine, so their may not be a System Builder for Windows 8, which would close a semi-legal loophole that Windows enthusiasts often used to save some cash when putting together their own PCs. In the past Microsoft hasn’t allowed System Builder customers to phone in for tech support, restricting them to online help forums. It’s not clear whether that restriction will continue in Windows 8.
Windows Prices Are Coming Down
In historical terms, the prices Microsoft is charging for Windows 8 are great deals. In 2009, Microsoft charged $119.99 to upgrade Vista to Windows 7 Home Premium, $199.99 to upgrade to Windows 7 Professional, and $219.99 to upgrade to Windows 7 Ultimate. Microsoft also offered a two-week promotional deal that allowed consumers to pre-order the Windows 7 Home Premium upgrade for $49.99 and the Windows 7 Professional upgrade for $99.99.
Standalone retail copies of Windows 7 Home Premium, Windows 7 Professional, and Windows 7 Ultimate were priced at $199.99, $299.99, and $319.99.
Microsoft originally charged a whopping $399 for Windows Vista Ultimate, on down to $199 for Windows Vista Home Basic. Upgrade versions ranged from $99 to $259 for Windows Vista Ultimate. In 2008, Microsoft cut Windows Vista Ultimate’s price to $319 and the upgrade version from $259 to $219 in an effort to encourage consumers to upgrade to Windows 7. It also cut prices for upgrade versions of Vista Home Premium, its mainstream product, to $129 from $159.
What’s all this mean? Over time, Microsoft is charging less for its desktop operating system, most likely to keep users using PCs. At one time, Microsoft’s pressure came from the Macintosh, and from a lesser extent, Linux. That’s still the case, as upgrades to Apple’s latest operating system upgrade, Mountain Lion, costs $20 for five licenses.
Now, many potential new PC buyers are turning toward smartphones and tablets. The PC’s role as a content-creation device is becoming relatively less important as the “content” consumers are creating includes photos, tweets, text messages, status updates and the other digital flotsam and jetsam of our daily lives. Even notebooks may be too much of a pain to haul out, turn on and use to check the weather or post a Facebook message.
In that environment, Microsoft may feel it simply can’t charge as much for Windows as it used to.
Follow the Money
Fortunately for Microsoft, it doesn’t have to. Windows isn’t Microsoft’s money maker. That role is filled by Microsoft’s Business Division, or Microsoft Office, which recorded $6.2 billion in revenue last quarter, about a third more than the Windows and Windows Live Division, with almost double the profits. Microsoft’s Server and Tools business also pulls in more revenue than Windows, at roughly the same level of profitability. Windows is becoming the gateway to higher-margin services like Office and Microsoft’s other business and enterprise products.
While it’s unlikely that Windows will ever serve as a “loss leader” - the heavily discounted and advertised items that get consumers into stores and shopping - it seems likely that Microsoft will continue to lower the price of Windows over time. Whatever the reasons, consumers will benefit.