Microsoft Wants 5% Cut of Each New Windows PC

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cadder

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5% seems like it would be in the consumer's favor. And why do they charge so much for the retail versions of the OS? I figure the average home PC is probably closer to $500 than $1000, so if they receive $25 for the license for the OS on that machine, why do they charge $100 or more at retail for the same thing?

I'm sure they have figured this out better than we have, but it seems like they would prefer a sliding scale with higher than 5% for the low end computers and less than 5% for the upper end computers.

How many computers are sold to business users for significantly higher than $1000? Maybe there are enough of these sold that they want their 5% of the higher prices.
 

pharge

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hmmm... I am confused... Shouldn't MS charged the OEM based on the version of OS installed not on the price of the computer?

Since most of the computers (desktop or laptop... except netbooks) have Vista home/enterprice installed... will these percentage still 5%? or this is just the average?
 

ethanolson

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They're exactly opposite of Apple. The MS OS costs less when bundled with the hardware but more on the shelves. Apple is the other way around where you're paying a ton for the OS because of the controlled hardware for it... but it's cheaper than MS Windows if you buy it on the shelf.
 

bustapr

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Since pc manufacturers aren't going to like this, I imagine this would make for a good moment for pc manufacturers to consider linux. It'll be way cheaper and they wouldn't have to worry about warranty issues, since most pcs are sent back due to virus crashes. They'll save a lot of money.
 

ethanolson

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I work for HP and the price is different based on the version. His 5% number sounds like it's 90% home editions... leading me to believe he commented with retail stats.

I know that MS gets about $15-25 per XP Home on a netbook... which is a little more than 5%, but they get more for their business/pro editions.
 

thackstonns

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[citation][nom]bustapr[/nom]Since pc manufacturers aren't going to like this, I imagine this would make for a good moment for pc manufacturers to consider linux. It'll be way cheaper and they wouldn't have to worry about warranty issues, since most pcs are sent back due to virus crashes. They'll save a lot of money.[/citation]

except then alot of people would be using Linux and everyone would start writing virus's for it. Of course then Microsoft could claim its secure. I hate it when people go oh well linux is secure, oh well apple is secure. Yep they are cause no one is going to try to steal information 2% of the computer market. They are going to focus on the other 98%.
 

jellico

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Well, 5% on the cost of a computer for an OEM computer of the operating system seems pretty reasonable. It costs me a lot more when I buy an OEM copy from Newegg when I put together a new system. Unfortunately, I doubt small-scale retail system builders can get an OEM distribution license.
 

domenic

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[citation][nom]bustapr[/nom]Since pc manufacturers aren't going to like this,....[/citation]

Why are pc manufacturers not going to like this? Do you think they expect to get windows for free? 5% sounds very reasonable to me.
 

Pei-chen

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[citation][nom]cadder[/nom]5% seems like it would be in the consumer's favor. And why do they charge so much for the retail versions of the OS? I figure the average home PC is probably closer to $500 than $1000, so if they receive $25 for the license for the OS on that machine, why do they charge $100 or more at retail for the same thing?[/citation]
Two words; customer support.

If you buy retail and has a problem, it is MS' job to assist you. If you have a Dell, it is Dell's job to assist you. If you bought an OEM disc from newegg, it is your job to provide customer support.
 

amnotanoobie

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[citation][nom]cadder[/nom]And why do they charge so much for the retail versions of the OS? [/citation]

A manufacturer could state to Microsoft how much they'd be needing in the next month or so, which would mean a stable income for Microsoft. (Plus manufacturers buy thousands of copies at a time) With retail however there is no guarantee how much you'd be able to sell at a given point in time.


The fact also that Microsoft is the sole provider of Windows might have also something to do with the retail price.
 
A sliding scale with 5% as an average isn't all that bad. Microsoft can get away with the low price since it most assuredly gains quantity. The reason retail is so pricey is to make pure profit, which also explains why MS is happy with a 5% figure.

PC OEMs will continue to use MS no matter what deal they are cut. The general populous works and plays with windows; this means that if they cut out windows and start with linux they will lose a vast majority of sales. Then keep in mind the compatability issues to be had with a non-windows OS.
 

jarnail24

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Hold up this article is so misleading. Microsoft doesn't want to raise it to 5% microsoft already gets 5%. This was with an interview with a microsoft employee about how much they charge for a license to oems. This article is making it sound like microsoft is raising their prices which they're not, they're just letting the consumer know how much they charge for the first time.
 
G

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Microsoft are still cunts that charge way too much for many things, but to call Windows on a retail PC "the MS tax" is just retarded. The various/server enterprise products are priced ridiculously high. In contrast, OSX costs about the same as the base hardware, heaven forbid you want a RAM upgrade.

In all fairness though, it's my understanding that Rabbi Jobs does personally bless each stick of RAM that goes in a Mac, which somewhat justifies the price. /sarcasm
 

cabose369

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If Microsoft forces Manufacturers of computers to pay another $50 per Windows License all that is going to mean for consumers is that every computer is now going to go up in price at least $50.

LAME!!!
 

manjyomethunder

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"It's the Microsoft tax."

I didn't realize that when I bought something, I was paying all tax and not like, a price. I had no idea that things didn't like, have value. How dare Microsoft charge for it's products.
 

manjyomethunder

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[citation][nom]cabose369[/nom]If Microsoft forces Manufacturers of computers to pay another $50 per Windows License all that is going to mean for consumers is that every computer is now going to go up in price at least $50.LAME!!![/citation]

Learn to read the article, 5% is the cost of the actual license for the copy of Windows. Not an additional cost over the license.
 
G

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Like jarnail24 said, M$ is just stating how much they currently get from OEMs. However, I wonder if this is just for certain agreements. I worked several years for an IT company that almost exclusively built computers for its clients. (This was back when it was cost-effective to do so. Nowadays IT companies usually just resell Dell or HP products, or the clients work with said OEMs directly.)

If the client didn't have an Open License agreement, we bought OEM licenses and media for ~$130-$140 each for Win2k or XP. There was no 5% additional charge. If the 5% is referring to the cost of each OEM license, then we were paying almost three times that. If Dell and HP only pay $50 per license, then they are getting a substantial discount.
 
[citation][nom]cadder[/nom]5% seems like it would be in the consumer's favor. And why do they charge so much for the retail versions of the OS? I figure the average home PC is probably closer to $500 than $1000, so if they receive $25 for the license for the OS on that machine, why do they charge $100 or more at retail for the same thing?I'm sure they have figured this out better than we have, but it seems like they would prefer a sliding scale with higher than 5% for the low end computers and less than 5% for the upper end computers.How many computers are sold to business users for significantly higher than $1000? Maybe there are enough of these sold that they want their 5% of the higher prices.[/citation]

They charge so much for the retail version because of the tech support. A customer can use up alot of tech support hours on seemingly trivial issues.
 

SAL-e

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[citation][nom]quiteadiscount[/nom]Like jarnail24 said, M$ is just stating how much they currently get from OEMs. However, I wonder if this is just for certain agreements. I worked several years for an IT company that almost exclusively built computers for its clients. (This was back when it was cost-effective to do so. Nowadays IT companies usually just resell Dell or HP products, or the clients work with said OEMs directly.)If the client didn't have an Open License agreement, we bought OEM licenses and media for ~$130-$140 each for Win2k or XP. There was no 5% additional charge. If the 5% is referring to the cost of each OEM license, then we were paying almost three times that. If Dell and HP only pay $50 per license, then they are getting a substantial discount.[/citation]
Thank you for sharing that. Some time ago I posted this and some guy called me a liar. Now every one knows that OEM version soled at Neweeg is simply retail version without support from MS. I used to be small builder my self and the only way to get real discount from MS was by signing exclusive contract with them. In other words not to sell PC without OS, with Linux or other OS. So It is MS tax of 5% to any Linux user if this user can't get 5% discount from OEM for PC without OS.
 
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