3 Reasons Microsoft's Windows 8 Pro at $39.99 Changes Everything

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Windows 8Microsoft (MSFT) isn't going to take any chances: The world's largest software company will be offering most of its customers -- PC owners running XP, Vista, or Windows 7 -- the chance to pay just $39.99 to upgrade Windows 8 Pro when it becomes available later this year.

The move is bold. We still don't know exactly when the new platform will go on sale, but the upgrade pricing is a fraction of what Mr. Softy has charged in the past.

Microsoft seems to be taking a page out of the Apple (AAPL) playbook with cheap operating system upgrades. The company will also include a free download of the upcoming Windows Media Center for those upgrading digitally.

This is a big deal. Let's explore a few reasons that it matters.

1. PC makers will be able to keep selling computers over the next few months.

Desktop and laptop sales have stalled lately, and industry watchers expect that to get even worse this new quarter.

There are several factors holding back PC sales, but one is that buyers have been holding back in anticipation of Windows 8. Why buy a Windows 7 system when the fresher OS is just around the corner?

Well, the $39.99 upgrade -- and the seamless upgrade path for Windows 7 users in particular -- makes that less of a barrier. PC sales will continue to be slow for various other reasons, but at least now there isn't a legitimate reason to wait for Windows 8 to roll out as a factory-installed option in new PCs.

2. Low Price Means High Conversion.

The price tag may hit Microsoft's margins, but the company could very well make that up in volume. There are going to be a lot of people upgrading, and that's going to help the software giant draw developers to its Windows Store.

This is really important. Windows 8 was designed with "good enough" touchscreen computing devices in mind, and strong initial success may improve Microsoft's chances of finally mattering in tablets and smartphones.

3. Microsoft Can Use the Good News.

With sluggish computer sales, this week's $6.2 billion charge at its online business unit, and problems with mobile partner Nokia (NOK), Microsoft needs a hit to win back investors.

Yes, Microsoft's Xbox 360 is now the top dog when it comes to video game consoles, but operating system software has always been the company's bread-and-butter business.

The well-received rollout of Windows 7 proved that the company could overcome the critically maligned Windows Vista. Now it needs Windows 8 to be even bigger.


Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Microsoft and Apple. Motley Fool newsletter services have recommended buying shares of Microsoft and Apple, as well as creating bull call spread positions in Microsoft and Apple.


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Chris

I had purchased the Windows 7 Family Upgrade pack back in 2010, and I'm not very inclined to give more money to Microsoft, even if it's only $39.99. I'm permanently switching to a Linux distro.

July 08 2012 at 12:22 AM Report abuse rate up rate down Reply
Lupin

I will be getting Windows 8 becaus it has Storage Spaces. I played around with the release preview in Vbox, and subjected Storage Spaces on a couple of scenarios like MB dying, one HDD dying, stuff you encounter in real life. The parity mode does quite a good job and was able to rebuild my storage. I think that alone, for me, was reason enough to get it. Windows 8 has "Drobo" built-in. I am trying to look for an open source equivalent but so far I have not found any.

July 06 2012 at 12:59 PM Report abuse rate up rate down Reply
acdinc1

Great. I am still waiting for Congress to pass the 'software lemon law', where I can get my money back on ME, 2000, Vista, and 7. They got enough of my money. So long Microsoft.

July 05 2012 at 11:48 AM Report abuse rate up rate down Reply
dahagen

I just bought a computer and it came with an offer to upgrade for $14.99 when 8 is available.

July 04 2012 at 11:07 AM Report abuse rate up rate down Reply
Richard

I go back to days of DOS, I could do a techs job easy, thats a shame as I was a construction worker and had to fix friends and my own all the time. Tech support sucked. All they knew how to do was tell you to reinstall the os after hours of trying everything under the sun from a written script. I look back now and I wish i had never bought a damn comp or got near one. Its been a long road and a pain in the keester. Microsoft, you want to make most of us happy, put out a pc that will game from hell to run all the current xbox games/ and pc games with enough umph to handle the next 3 years. basically a cross platform for all the PC gamers who spent millions to get you where you are now. I'm 46 and still like to game, but screw your xbox give me a mouse and keyboard.

July 04 2012 at 9:06 AM Report abuse rate up rate down Reply
forensicaudio

Oh, Mighty Microsoft, if you really want to shake the ground at Redmond and rudely awaken the World, give loyal, weary, battle-scarred MS Windowophiles a $39.99 Office Professional upgrade to go along with the $39.99 Windows 8 upgrade.

July 04 2012 at 4:14 AM Report abuse rate up rate down Reply
mrbrian200

I installed both pre-releases including the current Consumer Preview. Frankly I am not that impressed with it.
Unlike Windows 7 RC which I adopted as my primary OS immediately (and bought retail day 1), Win8 CP has become mostly a "play toy" like Ubuntu: it's there, I don't particurarly care for it...ok I need to do something...reboot to Win7.
MS seems primarily consumed in a "catch up" to competing touch enabled platforms. My overall opinion is the Windows 8/Metro concept, for a desktop PC, currently is a disasterous hodgepodge of non-unified interface designs. Instead of bringing touch devices up to some new innovative level of functionality unified with an innovative touch enabled desktop OS, Windows 8 instead drags the PC experience down by duplicating the experience on an ipod touch + a strong dose of "incoherency" in desktop "mode". They may have trouble giving this one away. The release for desktops needs to be pushed waaaay back: not nonths->years.

July 04 2012 at 3:23 AM Report abuse rate up rate down Reply
susan mettert

not buying it

July 04 2012 at 2:55 AM Report abuse rate up rate down Reply
Setanta

LOL --ANOTHER BOMB on the levEL of VISTA---and micrObrains should have given EVERY SINGLE CONSUMER STUCK WITH VISTA a total REFUND and a free windowsXP disc back then.
haven't heard ONE GOOD THING on this windows 8 either.

July 04 2012 at 12:41 AM Report abuse rate up rate down Reply
1 reply to Setanta's comment
Setanta

aaaaaaaaaaaaaaaaaaand that's WHY they're touting this as a ""deal"".

July 04 2012 at 12:43 AM Report abuse -1 rate up rate down Reply
SPQR

with all the money in the world why can't they make a system that actually works

July 04 2012 at 12:28 AM Report abuse +2 rate up rate down Reply