M$ As Comedian, Raising Prices on “8”… HAHAHA

As if the slump in PC unit sales and the tepid response of markets to “8” weren’t enough, M$ is nailing its coffin shut from the inside by raising prices…

“As previously announced, all of the above prices end on January 31. Starting in February, all editions of Windows 8 will sell for their full list prices, which means the cheapest Windows 8 upgrade will go for $119.99.

Note, however, that unlike the discounted upgrades offered previously, that price just gets you Windows 8, not Windows 8 Pro. If you want the additional Pro features – including BitLocker encryption, domain connectivity, and Hyper-V virtualization, among others – you’ll need to shell out a little more for the Pro upgrade edition, priced at $199.99.

see Microsoft to end Windows 8 discounts on January 31 • The Register.

For decades, M$ has agonized over finding prices that the market would bear. Now they are trying to compensate for reduced volumes by increasing prices. The death-spiral has commenced. Expect to see major agony in Redmond in 2013. Raising prices on a sluggish product will obviously kill uptake. The rate of decline of the empire will soon increase dramatically. I look forward to next week’s quarterly report. It should be the last one they can suggest business as usual.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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28 Responses to M$ As Comedian, Raising Prices on “8”… HAHAHA

  1. oiaohm says:

    bw sorry HTC makes Windows phone 8 and Windows phone 7 devices of exactly the same spec as a matching Android version. Yes the screen and internal cpu and webcam are all identical. The Android version sells more.

    –The software doesn’t affect market share at all.–

    So idea that software is not a factor is documented bogus. Even casing between the Windows Phone and the Android models is very similar.

  2. bw, continuing to beg the question, asserts without proof, “People buy smart phones based on their view of the hardware and not the software. The software doesn’t affect market share at all.”

    Let’s see. Everyone and their dog except HP is cranking out smart thingies with Android/Linux and they sell. Apple and RIM crank out smart thingies with their pet OS and they sell. It’s only the smart thingies running M$’s OS that don’t sell well.

    If bw’s thesis had merit one would not see Android/Linux units rapidly leaving iOS units behind. We all know Apple makes nifty hardware…
    see Cumulative Android Smartphone Shipments Will Exceed 1 Billion in 2013

  3. bw says:

    What does Microsoft have to do with the smart phone market? Nokia uses Windows Phone and others do as well, but it is not much of a factor. People buy smart phones based on their view of the hardware and not the software. The software doesn’t affect market share at all.

  4. bw wrote, “There is not much room in that for anyone except Apple and Samsung to be major players. The OS doesn’t matter much.”

    I care about the OS and apparently the market does or M$’s stuff would be getting a big share.

  5. bw says:

    In the US, at least, almost all smartphones are sold as part of a service package with one of the phone companies such as Verizon, ATT, Sprint, or T-Mobile. Phones, regardless of brand, cost $99 at the high end for the hottest models or $0 for the ho-hum models. Sometimes there is a $49 choice.

    In that sort of environment, there is little concern for price and the company that wins is the one that creates a trend. There is not much room in that for anyone except Apple and Samsung to be major players. The OS doesn’t matter much.

  6. oiaohm says:

    bw Samsung is only one of the major chip foundries that produce arm chips and all other parts to make phones.

    Texas Instruments, Qualcomm, Allwinner, ST-Ericsson, Motorola all have there own chip production foundries.

    I do expect a lot of Android makers will fall by the wayside. HTC is basically the the front brand of Qualcomm foundries for arm devices. ST-Ericsson is fairly in face sony devices.

    Difference socs have different performance. So they are not selling all exactly the same product.

    http://www.gartner.com/newsroom/id/2237315 The reality is Sansung past Apple on number of units sold long ago. Samsung only recently replaced nokia for volume.

    The reality with Android and Arm there is more room for startup companies. Since more hardware now exists that will run with Linux so a startup is not forced to go to Microsoft and other OS makers and beg for a embedded production license.

    Android is the enabling factor like Windows was for the PC age for the Device age.

    This is the problem at some point in the future there is going to be a full blown price battle in the device market.

    You call what IBM did making device susceptible to cloning. Android has exactly the same feature. Anyone with a chip foundry can get an arm processor production license. There is more than 1 screen maker.

    Reality Applications don’t run on all the OS models. This is something RIM and other Mobile phone OS’s are running into.

    Apple did the same thing in the PC age of dominance as it does with the ipad and iphone now. The idea that Apple will always be in the lead is wrong.

    bw the history of what happened to apple high profit position in PC’s most likely will happen to them with devices.

    Early on for desktop publishing and other things in the PC age you required Apple machines. Only latter did you start to see Applications running on all different OS types.

    We have seen the same happening now with ipad and iphone. Lot of applications for the iphone and ipad are spreading across to android. Very much how items like photoshop spread from Apple across to Windows.

    Bw we are basically watching a history repeat. Before Apple and Microsoft went at each other the PC market was very divided. Same was true of the mobile phone market.

    This is playing out like a repeat. Except this time Microsoft is sitting in one of the losing chairs.

    Apple due to there focus on appearance and art most likely will hold there chair as a small player. Like the same way a high end car maker is a small player. Even that they can be bring in a decent profit.

    By number of people using there devices Samsung beat. Apple long ago. Now the next is when will Samsung beat Apple on profit. Thing is Samsung does not have the same overheads as apple. Samsung shares it software development with the clones it competes against.

    Samsung will not become an monopoly because of Android.

    The smart phone market today really would not exist without Android and iOS. Android is only the first step remember that. Next steps are items like tizen and ubuntu on phones that start blurring line between what is desktop and what is phone.

    In fact apple is played as the 800 pound target to defeat by Android makers. Android makers know they are competing with each other on price and features.

    Every chip foundry wants to produce as many chips as possible and make the most profit from those chips. So yes there will be battles.

    Many of these chip foundries have been unable to get licenses to produce x86. So they want in. Android is enabling these foundries to move product.

    The bias against these foundries come about from the x86 design licensing.

    bw so many chip foundaries have scrapped out a living producing for chip for devices in times users would never as computers. That market is very low profit.

    Android enabling factor is allowing these foundries to enter the game.

    Samsung had the advantage out of all the foundries. Since samsung in its production lines produces every part required to make a phone or a tablet. Samsung could not make x86 processor chips. Before Android Samsung presence in phones was almost not measurable.

    Other makers have also moved into displayed since the release of Android. So yes Android has produced a market.

  7. bw says:

    “So the PC market is ruined??? ”

    I see your analogy here and it is thought-provoking. I think that the response has to be that quite a few makers have fallen by the wayside and/or been gobbled up by competitors because they are all selling the same product, Windows PC, and are forced to compete almost solely on price. The big difference here is that Windows was an enabling factor that created the industry to begin with by providing the opportunity for many small start-up companies to compete directly with the giant IBM and by the same token with the other major players Apple and Tandy.

    It may come to pass that a Samsung Android product will overcome Apple and lead to a Samsung monopoly on the business, but the conditions are slightly different in that IBM was an immediate player against Apple and the clones toppled IBM in the PC business. There is no such 800 pound gorilla to hide behind in the smartphone and tablet businesses, so the “clone the leader and beat him on price” strategy has no foundation to work with.

    IBM made the mistake of allowing its product to be susceptible to cloning when Microsoft was allowed to sell MS-DOS to anyone. Apple does not allow that sort of thing, so the iPhone and iPad are always unique and setting the pace in both businesses. If they keep doing that, they will always be in the lead. The only problem is that phones are not as completely differentiated by the OS software and hardware styling and design refinement are much more important in this market.

    With PCs, you needed DOS to run the popular apps. With phones and tablets, the apps run on just about all of the different OS models.

  8. Der Balrog says:

    I’m not interested in Windows 8. Not even for $0. And I used Windows 7 before which, as far as Microsoft operating systems go, was pretty good. But Linux does all I want, and XFCE is a sane desktop environment at a time when its competitors strive for God-knows-what.

  9. oiaohm says:

    Ivan history does not back that IBM directly murdered million by their own free will.

    Lance Armstrong should not be allowed to take part in competition ever again. Reason he does not value his own life above winning. We cannot be part of attempted suicide. Also from my point of view of the record of Lance Armstrong attempting to get others to follow his same path he should be procured for attempted Manslaughter many times over due to being in the USA possible facing death sentence.

    This would send clear message don’t do this. I am not kidding about attempted Manslaughter. Blood doping that he did do has lead to many athletes deaths. I don’t call Lance Armstrong a terrorist. I class him as a unsuccessful mass murderer. Who attempted to kill many and failed.

    Letting Lance Armstrong off is very much saying Nazi leader ship should not be punished. You cannot really blame the companies that made the gear to take blood and allow blood to be place back in a person. Lance Armstrong just abused that tech. IBM senses tech was abused by the Nazis.

    Put it this way it cannot be proved but Lance Armstrong might be a murderer. There have been quite a few suspect deaths from the USA cycling team after they have retired. This could be the long term side effect. Suspect for a highly fit person dieing under the age of 50 without any locatable medical issue.

    Ivan sport doping is mass murder. The problem is that the death is not instant. So its not as simple to see as normal genocide. You could call sports doping genocide because it target a particular section of the population. Unless we bring sport doping under control we are looking at over time the same size genocide as the Nazis performed. We gave the Nazi leader ship death sentences. I see no reason not to apply the Nazi precedent to those who lead others into sports doping to send a clear message if you do this and get caught you are dead.

  10. kozmcrae says:

    Oh, I see Ivan is back with his “IBM murdered millions” drone again. I could come back with the “Microsoft committed crimes against humanity” speech but that might encourage you to embarrass yourself some more with that IBM nonsense.

    So what do you say Ivan… Want to go at it?

  11. Agent_Smith says:

    Oh, boy…
    Any fanboy/troll that defends Microshaft, saying the market “chose” M$’ products because they are better really needs a history lesson, like BeOS and DR/Dos.
    See: http://www.groklaw.net/article.php?story=20090421111327711

    And: http://techrights.org/2008/08/19/oem-tactics-beos/

  12. oiaohm says:

    bw –I read somewhere that iPhones are taking some 85% of the profits in the smart phone business leaving little for anyone else.–

    Don’t be tricked by the numbers. Android device makers still make a very good profit. More and more Android device production lines have no human workers. So it only cost of parts. It can cost as little as 50 USD dollars in parts and power to make a phone. At the start of the PC age Apple also took a large slice of the profits.

    Yes Apple takes a larger percentage per Unit than any Android maker. Android in tablets has crossed 50 percent of all tablets sold.


    This is what you need to take note of. 2011 Apple pulled in about 85 percent of the profit. 2012 Apple only pulled in 70-75 percent of the profit. Yes scary right Apple only has a 7 percent global market share by devices sold and slipping. 10 percent drop in income per year is not healthy thinking is only been about a percentage of market share move.

    –I think that having so many Android phones competing with one another is ruining the business for the rest of the makers.–

    So the PC market is ruined??? Reality here hardware makers competing with each other is normal. They competed with each other using Windows Phone and Symbian Os before android turned up. If Android disappeared it still would keep on happening.

    Basically bw you are stating exactly the same as what Apple supporters did at the start of the PC age before Apple market share collapsed. All signs say that Apple market share is going to collapse again.

    bw Samsung has had there own stuff for along time http://en.wikipedia.org/wiki/Bada

    bw Gates is still at Microsoft as Chairman.

    bw if you please go an take a close look at the Foundation actions. You will find Microsoft solutions are used ahead of competing open source and other solutions.


    Part of the foundations job is to make Microsoft a future place to sell product. Give product away for free today make those areas dependant on Microsoft to make profit in future. Bill Gates over piracy in china stated that this is an acceptable policy. The foundation is just a new cover for this kind of action.

    Lance Armstrong took custom made drugs to avoid detection. So none of those drugs had long term studies on the long term side effects. There were a lot of suspect tests before Lance Armstrong got cancer.

    Base ball players are allowed to wear glasses They are not allowed to wear contact lens on the field. It is with the case of ball in face. Contact lens will do more damage than glasses that is not simple to repair. Again forbid is about long term safety.

    Mechanicals alterations they are limitations. What is the long term risk to Tommy Johns by his muscles being connected up in an advantage way. Lower than connecting it back up in the way it was. Because the way it was caused it to break in the first place.

    Most of the performance enhancing drugs that are forbid in sport have long term side effects. They are simply not good for you. Give short term advantage but you will pay for them latter.

    In fact using Russian tech you could make someone either taller or shorter. But due to possible long term and short term side effects this is also forbid. So yes there are limitations on what you are allowed todo to a person from a mechanical side if they are a sports person. Yes sport person not allowed to have random plastic surgery either. Something has to be broken before they are operated on.

    Yes a sports person is allowed to take all the restricted drugs under medical instruction while not competing if its required to assist them after a medical illness. This is not Lance Armstrong he took the drugs before he got a medical illness. He also competed while taking the drugs.

    With items like testosterone particularly to give stable dosage in blood stream you don’t want person massive exerting self. Unstable dosage of testosterone risks cancers. When body is working right and you exert hard body will release more to cover for the consumed amount. When body need to be given testosterone on medical grounds if you wish to live you no longer can be a sports person and have to live a more relaxed life.

    Yes this is the issue most forbid drugs to use are not about performance gain. Yes performance gain is the side effect. From a medical point of view the person is basically attempting to commit suicide in front of you for higher performance by taking performance enhancing drugs or blood transfusing of old blood and other methods.

    bw are you saying that sports bodies should not be trying to prevent people from killing themselves.

    Really from my point of view if it turns out that some coach gives performance enhancing drugs to a person without there clear knowledge they should be taken on attempt manslaughter changes. Because that is what it is basically.

    Glasses and medical intervention to repair damage is not attempt to kill the person.

    I think the point you missed is taking drugs and doing sport don’t mix dw. Since sport causes you body to consume drugs and unstable rates. So all the advantage of taking the drugs is now offset by higher risks of like secondary cancer and other illnesses. So what Lance Armstrong did was say I don’t care if I die as long as I win. Really can you call this acceptable.

    dw I know this because I have Asthma. I can take a short term steroid to restore my breathing. If I do I must stop doing heavy activity or I will consume the steroid too quickly and risk my life. The normal steroid to control Asthma is forbin to be in blood stream if you compete doing pro level sport. Due to what you are stupidly risking. You will not be punished if you drop out of competition if you have to use it. Not that it improves performance that much. In fact its a negative to performance on most people. Yes it prevent the airway from closing up but it also prevents you from fully breathing out.

    Not everything on the performance enhancing drug list truly does enhance performance if you are healthy enough to be performing in the first place.

    Yes the forbin drug list is many levels. Some you are not allowed while competing. Some what are custom made drugs you are not allowed at all due to no long term side effect information or the side effect information equal death. Some are also normal medications for treating illness that are not stable when combined with heavy activity.

    The steroid to control Asthma must not be in blood stream when competing or working out. So if they take a blood test from when you are home and find it no problems they will inform you they did detect it.

    So the sports body is really trying to save the athlete life. Some athletes are too stupid to obey those rules that exist to save them.

  13. Ivan says:

    So, you are in favour of having only one brand of automobile offered for sale at five times today’s price?

    If that one brand gets over 50mpg with ultra low emissions, who cares? Try a better analogy.

    Of course it’s illegal.

    Only in your mind. Have you thought about therapy to help you through your obsession with Microsoft?

    He was a terrorist. The idea that he may be redeemed by humanity is appalling. The harm he did cannot be undone nor forgiven.

    So Lance Armstrong should be strung up but IBM (which helped murder millions infinitely worse than winning a few bicycle races by doping) is A-OK. Nice.

    Get help, Bob.

  14. Lance Armstrong used testosterone which may have increased the rate of growth and spread of his cancer.

    Besides his health, he had no morals to speak of. Instead of simply lying like other frauds he abused people who spoke the truth about his fraud. He was a terrorist. The idea that he may be redeemed by humanity is appalling. The harm he did cannot be undone nor forgiven.

  15. bw says:

    I read somewhere that iPhones are taking some 85% of the profits in the smart phone business leaving little for anyone else. I think that having so many Android phones competing with one another is ruining the business for the rest of the makers. I saw an article that Samsung was going to come out with their own stuff, too.

    Interestingly enough, Samsung has almost all of the rest of the profits in that business. I expect that the companies like Sony and Motorola that are losing money selling smart phones are eventually going to disappear from that business.

    I think that you must have misinterpreted my posting if you think that my logic would exclude Facebook, Twitter, Google, and the Apple products from becoming so popular due to Gates efforts. Gates isn’t even at Microsoft anymore as I understand it and has been happy enough to just fool around with his foundation for a number of years now.

    Disney, too, seems to be on the decline in terms of popularity with the kiddies more oriented to Sponge Bob and the like. Harry Potter for the bigger kids and that belongs to Universal Studios.

    What do you think of Lance Armstrong really? He had a lot of medical problems and they were fixed, maybe too well, with drugs and medical processes. Tommy Johns started pitching a lot better once he had elbow surgery and they re-connected his muscles in a more advantageous way. What about contact lenses to give baseball players a better “eye”, too? Why is there a stigma about chemicals when mechanicals can certainly enhance performance as well? It seems to me that chemicals that restore a cancer patient to vim and vigor to the point that he wins an international race for years in a row cannot be so bad.

  16. bw wrote, “It has happened since then with Facebook, Twitter, Google, and even hardware items such as iPod, iPhone, and iPad.

    Whatever product becomes the rage at some point in time, even something like Tickle Me Elmo, automatically shuts out all competition due to popular demand.”

    iPhone has been swamped by Android/Linux smart phones. iPad is on its way to being swamped by low-end Android/Linux tablets. If your “wisdom” were valid, neither FB, Twitter nor Google would ever have taken off in the face of Bill Gates machinations…

    e.g. “Disney will promote IE (and no Other Browser) as the client browser software of choice for users of Disney Content by:

    • Designing the Disney Online Service so that it requires the use of Disney’s client (including a customized version of IE), provided that such obligation will apply only to the Win32, Windows 3.x. and MacOS and any additional Platforms for which a version of IE exists.
    • Displaying an IE logo as further described in Exhibit C.
    • Making commercially reasonable efforts to display an IE logo on the home pages of Other Walt Disney Company Web Sites and to include Other Walt Disney Company Web Sites when selecting the fifteen (15) most frequently visited pages on which to place the IE Logo as described in Exhibit C.

    Lance Armstrong would be proud…

  17. bw says:

    Still waters run deep, eh? I was merely noting that Microsoft won. Whether by hook or crook was not an issue, but it seems to have become one. Windows was just the first real example of what has happened a number of times since where a product becomes the “standard” and virtually everyone in the world jumps on. It has happened since then with Facebook, Twitter, Google, and even hardware items such as iPod, iPhone, and iPad.

    Whatever product becomes the rage at some point in time, even something like Tickle Me Elmo, automatically shuts out all competition due to popular demand.

    As to the sales numbers, I read an article that I cannot find back somehow that related that PC sales worldwide were some $237B, the smartphone market was some $87B, and the tablet market, mostly Apple, was some $37B. That’s two to one or so no matter how many boxes it gets shipped inside. Go find your own numbers.

  18. bw wrote, “PC sales are still double those of smart phones and tablets combined.”

    Nope. M$ and “partners” sell about 80 million sets per quarter while smartphones sell more than double that many units in a quarter.

  19. bw wrote, “I am sure that it is not illegal”, of excluding competition from the market.

    So, you are in favour of having only one brand of automobile offered for sale at five times today’s price? Of course it’s illegal. That M$’s co-conspirators did not complain is part of the problem. RICO might have been a more appropriate statute except the lobbyists spread money around.

  20. Finalzone says:

    let remind you Microsoft heavily relied on political influence to insure their “victories”. They only delay the inevitable, their own downfall.
    They panicked when netbook emerged with Linux OS from several company by extending Microsoft Windows XP and forcing manufacturers to stop Linux OS netbook.
    They cheated through the ISO by bribing politicians and consortum to validate their own messy format to maintain their status quo.
    They intentionally impose hardware manufacturer to produce device specifically for their systems by breaking the standard, deliberately preventing other non-Microsoft system to run on such hardware.

    Without the powerful political influence, Microsoft would be extinct a longtime ago. Apple (more vicious) narrowly avoided the same fate after being rescuing by Microsoft to maintain the semblance of competition. The point is big company can disappear at anytime due to its own stupidity.

  21. ram says:

    Microsoft, as many US corporations, is supported by the US government/Federal Reserve Bank. As such they don’t actually have to make a profit per-se, since they have access to the ‘printing press’. Similar to other government owned/controlled/supported organizations their products and ‘service level’ are completely uncompetitive in a free and open market.

  22. d. says:

    It seems to me every time I open a TV there’s a new windows 8 commercial coming out.

    One can only wonder, did ms take all that advertising money by saving in ui design, or are they paying for the ads with their own bundled adware?

    I don’t know, but to me the whole ridiculously oversized ad campaign seems a bit like putting lipstick on a pig… Like maybe they think if they flood the public with enough ads, people will overlook the catastrophic flaws in the actual product.

  23. bw says:

    I am sure that it is not illegal and as I remember it, Microsoft was in court for years about that very idea before the case was dismissed. That happened 10 years ago and they are still selling through the computer makers today.

    The only thing being undone is that PCs are becoming less necessary for many people due to the iPhone, Droid Phones, and iPads gaining popularity as the other guy notes above.

    When you look at what remains, though, it is still the biggest game in town. PC sales are still double those of smart phones and tablets combined.

  24. Adam King says:

    Amen. M$ is becoming less and less relevant with the emergance of smartphones and tablets. Their response is to flail around histerically and release winders h8 like it was something good.

  25. bw wrote, “anyone wanting to play from that day forward had to go by the new rule.”

    The new rule was illegal, bundling and exclusivity are not allowed by the Sherman Act. The government of USA allowed that violation to go so long that retailers and OEMs and many users became severely locked in. That is finally being undone by the mass of smart thingies extant. No one in their right mind can now claim that a personal computer must have M$’s crapware on it.

  26. bw says:

    The old saying “You cannot see the woods for the trees” seems to apply here. You have to take a step back to see the bigger picture.

    You said “What they did was get OEMs to “prefer” M$”, which says it all. You see them as rule breakers, but most others see them as new rule “makers” and the new rules work in their favor.

    It was like the invention of the forward pass in football. The game changed and anyone wanting to play from that day forward had to go by the new rule. Perhaps, as you point out, Google has managed to take a page from Microsoft’s playbook and will be the dominant player in the phone and tablet game, which I personally see as a different sport from the personal computer game.

    Consumers do love the new stuff and I have a couple of phones, a Kindle, an iPad, and even an older black and white Kindle in my home. But I still have a couple of desktops and a laptop in daily use. I love them all and each has some preference for some specific tasks.

  27. bw had a typo: “They have been at this game for a very long time now and they have triumphed over all competitors”

    That should have been “They have been at this game for a very long time now and they have avoided all competitors because they found it easier to cheat than to compete.” Face it. GNU/Linux didn’t crash when Lose ’95, ’98 and XP were being offered to the world and GNU/Linux was cheaper so M$ could not compete on price/performance. What they did was get OEMs to “prefer” M$ and since retailers had nothing else to offer, the OS being bundled with the PC, there was nothing else on retail shelves in most places. That effect lingers but in 2011/2012 OEMs seriously began to go around the obstacle M$ placed. It was nothing to do with competition, just opportunities not taken. Consumers are loving the new offerings…

  28. bw says:

    You can laugh all you want, but I think that Microsoft is playing a much deeper game than you give them credit for. They have been at this game for a very long time now and they have triumphed over all competitors, some of whom were very big fish compared to Microsoft at the time.

    I invested $40 in the Windows 8 Pro upgrade offered for my Windows 7 laptop that I am using to make this post. I will have to admit that it was somewhat of a struggle to adapt to it, but, over time, it grows on you and I find myself liking it more and more. One thing that I found to be very helpful is the StartIsBack app that cost $3 in the Windows App Store that makes the Desktop app in Windows 8 operate exactly like the desktop did in Windows 7. When I installed it, it even found all my old start bar settings and now that simple click restores the old Windows 7 look and feel completely.

    I’m so thrilled by it that I am going to do the upgrade on my old desktop, too.

    I am going to do it this weekend, too, in order to take advantage of the price break being offered. How can you go wrong for 40 bucks?

    I believe that everyone who is likely to update will do the same and it will all be over with soon. By standing firm on the upgrade price after January, Microsoft isn’t likely to lose much upgrade business and all the new users to Windows 8 will, as the article says, get it with their next new PC. By holding a high price at retail, the new computer buyers see the traditional pre-loaded Windows package as a bargain. They mentally subtract the retail price for Windows, say $200 for Windows 8 Pro, from the price of the machine and see the computer as a bargain, much like you might think that a $99 iPhone that comes with a two year service commitment is a bargain.

    If they kept the price low, then people would not feel as good about the package price. Meanwhile, the price paid by the computer maker can be whatever it has to be to keep everyone in business.

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