Microsoft won't cut Windows price to beat Linux
Reuters | at | by Mike
Microsoft won't cut the price on its Windows operating system to compete with a $199 personal computer that runs rival operating software, the No. 1 software company's CEO said on Wednesday. "Somebody is subsidizing that hardware. Somebody's losing -- people know what power supplies and processors cost," Microsoft Chief Executive Officer Steve Ballmer said at a Gartner technology conference here.
The $199 price tag is less than half the price of Windows-based PCs from low-priced vendors like Dell or Gateway, which sell PCs for as little as $500 or $600. It's also below the $399 entry-level price at eMachines Inc. Demand for personal computers has been weak for almost two years as both businesses and consumers have held back on spending. Gartner said earlier this week that a return to higher PC demand may be delayed as users make do with the PCs they already have.
Microsoft's Windows operating systems for low-end PCs costs about $50, and Ballmer said that price has been steady for at least seven years. Cutting the price of the operating system by $20, for instance, wouldn't sell more machines, he said.