Microsoft keeps customers in the dark over Windows 8 prices

Delay in pricing new OS due to desktop vs. tablet conundrum, analysts argue

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Pricing desktop upgrades and System Builder at a low price could alienate tablet OEMs unless their traditionally-less-expensive licenses were also greatly reduced. Using existing pricing models, like Windows 7's, would mean retaining revenue from desktop OEMs, yet make it difficult for tablet OEMs.

Apple, being both the developer of iOS and the iPad's OEM, does not have to pay anyone (except possibly itself via behind-the-scenes accounting) for a software license.

"I expect Windows 8 to be priced the same as Windows 7 but [that Microsoft will] provide some special discounts to OEMs for tablet and convertible devices," said Moorhead, referring to the hybrid hardware that combines features from notebooks and tablets.

If Moorhead's right, that would mean a Windows 8 upgrade will cost $120, the current price of Windows 7 Home Premium. Under his model, Windows 8 Pro would run $200, the same as Windows 7 Professional.

Other long-time Microsoft watchers are counting on lower prices. Last week, for instance, ZDNet blogger Ed Bott said, "There is strong evidence to suggest that Windows 8 will cost less than corresponding versions of Windows 7."

But there is another explanation for the pricing announcement delay, said Moorhead.

"Microsoft has significantly changed their communications strategy, deciding to keep most of their customers, developers, press and analysts in the dark until the very end of an execution cycle," Moorhead said. "This is the Apple approach, but the difference is, unlike Apple, Microsoft has a huge ecosystem of PC makers, hardware partners, and retail partners."

Gillen of IDC had similar thoughts, that for whatever reason, Microsoft simply doesn't want to discuss retail prices at this point.

"There is surely downward price pressure from every direction [but] I would expect that OEM pricing was established a long time ago," said Gillen, countering the idea that Microsoft hasn't released retail pricing because it's still wrestling with OEM pricing. "How do you get partners to invest millions of dollars or hundreds of millions in developing a product if they don't know what their cost of materials will add up to?"

Microsoft has been sluggish in revealing other aspects of Windows 8. It didn't unveil the versions it would sell until mid-April, about two-and-a-half months later in the development cycle than in Windows 7's case. It's also declined to specify prices for the Surface line, its first foray into PC and tablet manufacturing.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@ix.netcom.com.

Copyright © 2012 IDG Communications, Inc.

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