Digitimes Research: Microsoft to release new inexpensive notebook solution; unlikely to receive full support from vendors

Joanne Chien, DIGITIMES Research, Taipei 0

Microsoft has provided brand vendors its Windows 8.1 with Bing solution, offering low Windows licensing fees enabling them to sell notebooks at US$249 or lower. Following the initial release on June 1, 2014, Microsoft is set to release a new solution in February 2015.

To prevent the product line from hurting its brand partners' profits, Microsoft will limit the solution to only 14-inch and below models in mature markets. But vendors will still be allowed to release 15-inch models using the solution in emerging markets.

Although Microsoft's specification changes for Windows 8.1 with Bing are mainly in consideration of brand vendors' profitability, Digitimes Research believes vendors that have strong market influence, will still be unwilling to largely cooperate with Microsoft to adopt the solution in 2015 which will impact Microsoft's plans of using inexpensive notebooks to suppress Chromebook development.

Microsoft started negotiating with notebook vendors about the Windows 8.1 with Bing solution in October 2013 and is charging a low licensing fee for notebooks that adopt the platform and are priced at US$249 or below, aiming to push vendors to release more Windows-based notebooks that have price points similar to those of Chromebooks.

So far few vendors are aggressively pushing related products considering the market segment's maturity and low profits.

The top-5 brand vendors' shipment targets for the product line by the end of 2014 range from 1-1.5 million units maximum to 500,000 units minimum and are expected to achieve shipments of 4.5 million units altogether in 2014.

Meanwhile, Chromebook's on-year shipment growth is expected to maintain at 100% in 2014 and Microsoft's inexpensive solution will not yet create any pressure on Chromebook sales.

This article is an excerpt from a Digitimes Research Special Report (2015 global notebook demand forecast). Visit our latest Special reports.