Microsoft talks Windows pricing for PC vendors

— 6:00 AM on September 17, 2009

In April, anonymous tipsters told the Wall Street Journal that Microsoft made less than $15 a pop from Windows XP-powered netbooks. The same sources pegged the company's cut of Vista PCs in the $50-60 range. Microsoft itself stayed mum.

Well, Ars Technica now says the company has finally spilled the beans about how much it charges PC vendors for Windows. While answering questions at the Jefferies Annual Technology Conference, Microsoft corporate strategist Charles Songhurst said the following:

"If you think of the $1,000 PC, which has kind of been the benchmark for the last decade or so, then we've always charged about $50 for the copy of Windows for that PC," Songhurst revealed.

"So that's five percent. So if you think about charging $100, $200 or if you think about a super high-end PC, you know the Sony Vaios or anything that's there for around the $1000 mark, or the Alienware PCs that are even higher, if we can get that constant percentage then we should be indifferent to the number five points in the market," Songhurst continued.

The estimate wasn't very far off, then, although it sounds like Microsoft's cut from a $600 PC would only be around 30 bucks, if the 5% figure is a flat rate.

Songhurst apparently didn't sound too worried about netbooks robbing the company of revenue, either. Ars says he explained that most folks who buy netbooks "already own a few other PCs," and others opt for netbooks because they can't afford pricier systems to begin with. "So as long as they [cheap PCs] are not cannibalistic to the total PC demand. . . . We think that the net's beneficial to us," the executive added.

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