Microsoft has come to an agreement with low-cost notebook vendors that it will be reducing its Windows 10 licensing cost for models that will be launched this year, Digitimes reports.

The new licensing rates will cover 2017 notebooks that are smaller than 14.1 inches, and will take into effect by March 1.

According to Taiwan-based supply chain manufacturers, the new rates will be based on the screen size of the notebook, the type of market where the notebook will be sold (emerging markets or developing markets), the type of hardware (entry-level, mid-range, or high-end), and the type of notebook (hybrid or clamshell).

Microsoft Lowers Price Of Windows Notebooks To Compete Against Chromebooks

The lowered licensing rates could be due to the competition the Windows-powered laptops are receiving from Google Chromebooks, especially in the education segment where the latter is notably popular. Chromebooks are typically cheaper across the board, although there are a few high-end models that reach the $500 price range. This is because Google does not charge a license for the use of its Chrome OS platform.

Why Chromebooks Are Gaining An Edge Over Microsoft

The operating system used in Chromebooks is web-based, and the software applications are stored in the cloud. This is why an internet connection is always needed when using a Chromebook, although some of its apps do have an offline version. And since Chromebooks support Google Play, Chromebook users can also use Android apps on their notebooks.

The popularity of Chromebooks has led many computing device manufacturers to come up with their own affordable version, such as Lenovo, Dell, Acer, and Asustek Computer.

Samsung also announced at the recently concluded CES 2017 that it is releasing the Chromebook Pro and Chromebook Plus.

Another reason for Microsoft to undercut licensing fees could be due to the overall decline of PC usage in recent years, as annual worldwide PC shipments fell in 2016. According to Gartner, PC sales have declined in the past five years.

In another move to undermine its rival, Microsoft is also planning to come up with ARM-based Windows laptops, which are relatively cheaper than Intel-based ones.

Microsoft Made Similar Move In 2014

Google Chromebooks have been a thorn on Microsoft's side for quite some time. In fact, this isn't the first time that the company is lowering its licensing fees.

Back in 2014, the company undercut its licensing fees for Windows 8.1 by as much as 70 percent due to the strong competition coming from Chromebooks. The company charged a mere $15 to install Windows compared to its previous $50 licensing fee.

ⓒ 2021 All rights reserved. Do not reproduce without permission.