The $200 Lenovo IdeaPad

Microsoft has allegedly settled on a lower licensing rate for Windows 10 laptops this year. DigiTimes reports that low-cost devices under 14.1 inches will drop in comparison to 2016. The information comes from Taiwan-based supply chain manufacturers. According to the publication, these rates will come into effect on March 1st. As per Microsoft’s policy, fees will vary depending on the market, screen size and specifications of the devices.

This could be the Redmond giant’s way of addressing declining PC sales. Yearly worldwide PC shipments fell below 270 million in 2016, signaling the fifth consecutive year of deterioration. Though IDC and Gartner disagree on the exact amount of decline, it looks to be 5-6%.

The Chromebook Threat

However, this could also be an attempt to beat the competition. DigiTimes sources suggest that the change is linked to the popularity of Chromebooks. Microsoft may be right to fear the Chrome OS infringing on its market space, as Google doesn’t charge a fee at all. This results in a much cheaper alternative than Windows-based models.

Microsoft has previously run aggressive advertising against the Chromebook, calling it a “brick” when offline. It’s clear that the Windows developer feels somewhat threatened by Google’s OS. In other campaigns, the company has been criticized for comparing a Chromebook to a more expensive Windows laptop.

Beating the Chromebook could have the add-on effect of strengthening Microsoft’s hold on the education market. Software such as the Office suite also risks a loss in popularity if Chromebooks win out on price grounds, as only the web or Android apps are available.

It’s clear that Microsoft’s previous effort to diminish Chromebooks haven’t been popular, receiving heavy criticism. A reduction in price will likely be far more successful in beating the competition than somewhat desperate advertising campaigns. It’s not yet clear how much this will affect the retail price of Windows devices, but any reduction would help.