Microsoft Considers Lower Priced Windows to Compete with iOS, Android

Microsoft is having a hard go of it in the mobile device market, and to help turn that around is considering drastically reducing the price manufacturers pay to install Windows on their smartphones and tablets. Instead of the US$50 manufactures pay now for products priced under $250, Microsoft will charge only $15.

Microsoft may cut Windows costs for device makers to compete with iOS and AndroidMicrosoft may cut Windows costs for device makers to compete with iOS and Android

Along with the lower cost for product makers, Microsoft will be relaxing the restrictions on the types of devices that qualify. Instead of just smartphones and tablets, and sub- $250 device will be included, such as low-cost netbooks. Device makers won't be required to include touch interface hardware in their products, either.

Microsoft hasn't officially announced the new pricing structure yet. News of the plan comes courtesy of unnamed sources speaking with Bloomberg.

Pressure for the new pricing structure comes from iOS and Android competition and Microsoft's ongoing inability to take significant marketshare from either. By making Windows 8.1 more economical for device makers, Microsoft is hoping more companies will come back to the Windows camp.

Low cost Chromebooks, which run Google's Android OS, hit a more consumer friendly price point than most Windows-based netbooks. Cutting the price of Windows 8.1 could help boost netbook sales by bringing the price for consumers in line with competing Chromebooks.

Microsoft isn't commenting on the report, but it does make sense for the company to scale back what it charges device makers for Windows 8.1. In turn, that could increase competition in the handheld and small mobile device market, and that's good for consumers.