Microsoft to cut manufacturer price for Windows by 70 pct -Bloomberg

CHICAGO Sat Feb 22, 2014 12:55pm EST

CHICAGO Feb 22 (Reuters) - Microsoft Corp is reducing the price of Windows 8.1 for manufacturers of low-cost computers and tablets by 70 percent to compete with cheaper products like Google Inc's Chromebooks, Bloomberg News reported on Saturday, citing sources familiar with the program.

Computer makers will be charged $15 to license Windows 8.1 and pre-install it on devices retailing for under $250, compared with the standard fee of $50, Bloomberg reported. Any product that meets the price limit will be eligible for the discount, with no restrictions on the type or size of the device.

Sales of Microsoft's Windows 8 system, including its latest Windows 8.1 version, have been relatively slow since its launch 15 months ago. More than 200 million Window 8 licenses were sold, lagging Windows 7, which sold 240 million within its first year, according to Tami Reller, head of marketing for Microsoft.

The pace reflects a steady two-year decline in personal computer sales, as smartphones and tablet sales explode. Sales of tablets are set to overtake PCs worldwide next year.

Windows 8 was designed as a flexible new system that would work equally well on desktop PCs and touchscreen tablets, but it ended up alienating many traditional users, while the company's Surface tablet has not won over many Apple Inc iPad users.

A spokesperson for the company was unavailable for comment.

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