Death knell for Windows with Bing, licences carved up

Microsoft 'over-egged' Chromebook response

Microsoft is effectively killing off the Windows with Bing notebook market less than a year after it was created.

The low-cost portables released last summer were Redmond’s competitive response to Google’s Chromebook, giving PC OEMs the Windows OS licence at a heavily discounted rate, and consumers responded positively.

However, the threat from Google is now looking overplayed in Europe, and Microsoft wants to prop up slumping Windows licensing revenues where it can.

Senior sources at PC makers told us Microsoft is restricting use to 14-inch screen sizes and below, with a slight price rise in the low percentage point range for the remaining licences.

“Microsoft realised it over-egged the response to Google and is limiting the licences," said one source.

The problem for those making the hardware is the bulk of sales of Windows with Bing lappies were 15 inch, some 80 per cent to be exact, according to distributor data collated by Context.

A little over 115,000 units of Bing-based notebooks were sold across the UK during the fourth quarter, equating to 14.1 per cent of all clamshell mobiles, and just over 94,000 of these were 15.6-inch systems.

“We expect Bing-based notebook shipments to go down quite strongly following Microsoft’s new conditions for usage,” said Jeremy Davies, CEO at Context, "although it will be a while before we see this in distribution as vendors shipped a lot of Bing-based notebooks in Q3 and Q4, and these will ship through the channel in Q1.”

In contrast, nearly 53,000 Chromebooks were sold by disties in the same timeframe, representing 6.5 per cent of clamshells. Google has not been able to replicate the US success over here, partly because Wi-Fi access in UK schools is not as widely available.

Distributors are unlikely to shed a tear over the passing of Windows with Bing because it had had a “detrimental effect on average sales prices,” said Canalys research analyst Jason Low.

He said distributors were trying to stockpile Windows with Bing machines before the changes take hold, which we are told by sources happened at the end of last month.

Getting hold of enough Windows with Bing inventory is another matter though, with distributors reporting shortages, unlike in the wider notebook market.

Canalys forecast declines in the first half of this year, “the subsequent retail price increases will certainly stifle consumer demand”.

Microsoft refused to comment. ®

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