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 Windows 10, which comes almost three years after the launch of the
company's last operating system, will be available in 190 countries
as a free upgrade for users of Windows 7, Windows 8.1 and Windows
Phone 8.1. (http://bit.ly/1LR49yp)
The 'free' strategy is a calculated gamble, designed to put Windows
on as many devices as possible. The company would then make up for
any lost revenue by selling services such as Office over the
Internet, or cloud.
The new operating system is designed to work across laptops, desktop
and smartphones and is part of Chief Executive Satya Nadella's push
toward breaking Apple Inc <AAPL.O> and Google Inc's <GOOGL.O>
stranglehold in the mobile arena.
Windows faces intense competition from Apple's iOS and Google's
Android, which have cornered the lion's share of the mobile market.
"There are massive headwinds in Microsoft's bread-and-butter PC
business, making it crucial that the Windows 10 cloud approach opens
up new growth avenues for the Windows business," FBR Capital Markets
analyst Daniel Ives wrote in a note on Monday.
The immediate revenue hit from the 'free' strategy is unlikely to be
large, as Microsoft gets no more than $500 million of its $20
billion or so annual Windows revenue from upgrades, analysts have
said.
The vast majority of Windows revenue comes from hardware makers
installing it on new PCs and businesses paying for multi-year
licenses.
Chief Financial Officer Amy Hood said last week that Microsoft was
looking to generate additional revenue by building search and gaming
capabilities into the Windows 10 interface.
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Microsoft, which unveiled Windows 10 in September, skipped Windows 9
altogether, to put some distance between the new system and Windows
8, which confused many users by ditching the start button menu and
introducing a new layout.
Windows 10 brings back the start button, which may help the company
appease users who were unimpressed by Windows 8. It also comes
equipped with Microsoft's new browser, 'Edge'.
New PCs and tablets running Windows 10 will go on sale on July 29,
while the operating system will be made available on smartphones and
other devices later this year.
The company said in April that it was aiming to have 1 billion
devices running Windows 10 in two to three years.
(Reporting By Lehar Maan in Bengaluru; Editing by Simon Jennings)
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