How much does Microsoft make from PC makers with Windows 8.1?

Microsoft is making Windows 8.1 available to its PC partners for anywhere from 'zero dollars' to $15 per copy, according to recently disclosed OEM licensing information.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft still hasn't gone public with how much it plans to charge its PC maker partners (OEMs) or customers with Windows 10.

But thanks to a document published on Microsoft's OEM Partner Center site, we do know how much it is charging PC makers for Windows 8.1 on Intel-based tablets. (And why Microsoft describes its under nine-inch screen pricing as "zero dollars" instead of free.)

Microsoft announced last year that it would make Windows 8.1 available for "zero dollars" to its OEMs for devices with screen sizes of under nine inches. Microsoft also made available a new Windows 8.1 version to its partners known as "Windows 8.1 with Bing" that was designed for devices with screen sizes of nine inches or more.

The Windows 8.1 with Bing SKU requires OEMs to set Bing search as the default (though users can still change the default once they buy machines with it included). It also requires OEMs to use MSN as the default setting on the home page or any browser, again, with users being able to change that default if they so desire.

Microsoft officials didn't disclose the price of the Windows 8.1 with Bing SKU, and some assumed it was free. Others of us believed it was "low cost." The latter is actually the case.

According to Microsoft OEM pricing information -- a screen capture of which is embedded above in this post -- Windows 8.1 with Bing is listed at $10 per copy for "small" Intel-based tablets under nine inches in screen size. But after a "configuration discount," of $10, OEMs get that SKU for those tablets for free. For tablets with screen sizes of smaller (not greater, as I originally mistyped) than or equal to 10.1 inches, the Windows 8.1 with Bing SKU is listed at $25 per copy, with the same $10 "configuration discount," resulting in a $15 per copy cost for OEMs.

There's another related SKU that is also meant to help stimulate the market for mobile devices running Windows. The "Windows 8.1 with Bing and Office 365 Personal" is another low-price SKU available to OEMs. Like the Windows with Bing SKU, this one also requires OEMs to set Bing search and MSN.com as the defaults (changeable by users) on new PCs. This SKU also includes a free, 12-month subscription to Office 365 Personal.

Interestingly, the prices Microsoft is charging OEMs for this SKU with Office 365 are identical to those for the Bing SKU without Office 365, meaning Microsoft effectively is giving away a year subscription to Office 365 Personal to OEMs for free (which OEMs are passing along for free to users).

The "small" under nine-inch tablets get this SKU for $10, minus the $10 "configuration discount," bringing the price to zero. And the 10.1 and smaller size tablets get the SKU for $25, minus the $10 "configuration discount," or $15 per copy.

I doubt Microsoft will be quite ready to talk Windows 10 pricing this week at its "Windows 10: The Next Chapter" event on January 21. But if the company continues along the path it set with Windows 8.1, the company will likely continue to forego once-hefty OEM per-copy charges and hope to make up the difference with attached services, moving forward.

Editorial standards