It is not easy being Microsoft. The price of its Windows operating system, the foundation of its empire, is falling for personal computers. At the same time the market for PCs, on which Windows is installed, stagnates. Microsoft analysts have been busy cutting revenue targets.
What might happen if this continues — if the price of a Windows operating system on a personal computer drops to zero? It is currently roughly $35, Stifel estimates, but is heading that way. Chinese users with pirated versions of Windows 7 or Windows 8 will get free Windows 10 upgrades this summer, Microsoft announced this week. There are hundreds of millions of Windows users in China; three-quarters of them use pirated versions.
The amnesty points to a broader challenge: more and more operating systems are free. Google gives its PC operating system away — fuelling cheap Chromebooks that have sold like hot cakes. Apple’s operating systems are baked into the price of the device. The $40-a-pop operating system for consumer PCs is never coming back.