Microsoft wants to change how it monetizes Windows

Even as it has cut the price of Windows, Microsoft is still working on ways to monetize its platform. Chief Operating Officer Kevin Turner was speaking to investors last week, and GeekWire reported that profits are still the goal. Asked if the plan was to make Windows a loss leader to draw people into the Microsoft ecosystem, Turner said that the company had “not had any conversations” on this. He reiterated this when asked if the company was going to start losing money on Windows, saying “that’s not any conversations that we’ve had… we’ve got to monetize it differently.”

Microsoft Windows has made headway in the market for low-end laptops and tablets this year by reducing the price it charges device manufacturers, charging no royalty on devices with screens of 9 inches or less. That has resulted in a new wave of Windows notebooks in the $200 price range and tablets in the $99 price range. The long-term success of the strategy against Android tablets and Chromebooks remains to be seen. But we’re now seeing “the arrival of truly excellent low-end, Windows-based tablets and PCs,” writes Paul Thurrott on the Windows Super Site, pointing in particular to the HP Stream tablets and notebooks. Microsoft chief operating officer Kevin Turner made the same point during a presentation Thursday at a Credit Suisse technology investment conference in Phoenix, Ariz. Turner also made it clear that Microsoft won’t just be reducing the cost of Windows: It’s planning to make up at least part of the difference through a new business model.