Posts tagged Prices
Notebook manufacturers appear to be lowering the prices of some Windows 8 notebooks and tablets, presumably pinched by underperforming Windows 8 demand or a a slow selling season.
Six out of the fourteen Windows 8 notebooks or tablets sold by Microsoft via its Windows Store now come with discounts attached, CNET noted, with one — the Toshiba Satellite U925T-S2130 — slashed 30 percent from $1,149 to $799. On Amazon, a number of the most popular Windows 8 notebooks seem to be discounted about 20 percent, although Amazon’s seemingly perpetual discounts from list price make it difficult to tell what is new.
There are two likely culprits: the date, and the data.
Both the first and second quarters are traditionally slow times for electronics sales, particularly compared to the months-long run-up to the holidays. Given that it’s the first week in April, market-research firms require a few days to assemble their snapshots of first-quarter sales, and their predictions for the upcoming quarter. We know that PC sales dropped 6.4 percent during the fourth quarter of 2012, and IDC and Gartner are likely preparing numbers that show further declines in the first quarter.
Retailers and manufacturers themselves, however can react immediately. It’s certainly possible that Hewlett-Packard, for example, decided to cut the price of its HP Envy X2-11-G012NR touchscreen notebook by $250 to $599, a drop of just under 30 percent, for seasonal reasons. (On Amazon, a related X2-11-G010NR was discounted from $999 to $680, a drop of about 32 percent.)
On the other hand, Windows 8 notebooks, Windows RT devices and the Surface tablet have generally appeared to struggle in the market. March data from Net Applications shows Microsoft’s Windows 8 still lagging behind Windows 7, Windows XP, and Windows Vista, although its 0.5 percent gain in total market share places it at 3.17 percent of the PCs Net Applications tracks. Since November, Windows 8 has climbed about half to 0.6 of a percentage point of market share per quarter. The problem is that WIndows 7 has held relatively steady at between 44 and 45 percent.
It’s A New, Low-Cost PC World
The reality, analysts have said, is that Microsoft needs to adjust to the new reality of lower-cost PCs.
On average, the Windows 8 notebooks that Microsoft sells appear to be higher-priced than the notebooks that retailer Best Buy, for example, lists as its “best selling” models. The average price for a Best Buy Windows 8 machine appears to be about $699, while only four of fourteen models at the Microsoft Store are below that amount.
“[D]evices based upon its new Windows 8 and Windows RT operating systems failed to gain much ground during their launch quarter, and reaction to the company’s Surface with Windows RT tablet was muted at best,” IDC Ryan Reith said in January. “We believe that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices.”
Both Microsoft and Amazon appear to be discounting on the order of 20 percent, with tablets like the Samsung Ativ getting slightly bigger discounts. Still, Best Buy doesn’t seem to be actively promoting any discounts, and just a handful of NewEgg’s Windows 8 machines have been marked down — and with just single-digit discounts, at that. (Some of the more extensive discounts are attached to bargain-basement PCs, like this Asus model.) So it’s possible that we’re seeing the first tics of a nervous industry.
At this point, a fire sale is an unlikely scenario — margins in the PC industry are already too thin. But all it takes is one smaller PC manufacturer looking to boost its sales numbers, or a larger manufacturer that gets cold feet. If that happens — well, look out.
Image Source: Microsoft
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Unable to light a fire under Windows 8, Microsoft is holding a fire sale instead.
On Wednesday, The Wall Street Journal reported that Microsoft is offering significant additional discounts on both Windows 8 and Microsoft Office to PC makers that will include the software in small laptops that include touchscreens.
Specifically, the Journal reported that Microsoft was offering computer makers a package of Office and Windows 8 for $30, when the normal discounted price of the bundle is $120. It’s important to note that even the normal $120 figure already represents a substantial savings over what consumers could expect to pay if they purchased both products at retail; at least $140 for Office and $200 for a Windows 8 upgrade, for a total of about $340. Microsoft representatives declined to comment.
(Microsoft also reportedly honored an accidental “discount” that UK residents discovered, where an upgrade to Windows 8 Pro, normally £189.99, was “mistakenly” offered for £44.99.)
In other words, PC makers are paying roughly 10% of the retail cost of Windows 8 and Office to include the Microsoft programs with their products. Note that the discounts apply to laptops with screen sizes of less than 10.8 inches, which have traditionally cost anywhere from $299 to $499 - iPad territory. The idea, apparently, is that slashing costs will spur PC makers to invest more heavily in small-form-factor Windows 8 laptops, and/or allow them to lower their retail prices. Either way, the Windows world wins.
Why Is Microsoft Cutting Prices Now?
Why is this happening now? Most likely because Windows 8 sales are sputtering.
Using the Net Applications data that Microsoft prefers, in part because Microsoft feels that it more accurately reports real-world usage, the most recent numbers show Windows 8′s desktop operating system market share nudging past Mac OS X 10.8. That’s expected, given the relatively high percentages of Windows PCs in the market.
But NetApplications’ data also shows Windows 8 sales growth seemingly, possibly, maybe, flattening out a few months after its October launch. In November, NetApps claimed that Windows 8 had 1.09% of the market; in December, 1.72%; January, 2.26%; and in February, 2.67%. Zoomed in, the graph looks like this:
Is that a peak forming on Windows 8′s growth curve, or does the line still indicate signs of healthy growth? Linux blogger (and my former colleague) Steven J. Vaughan-Nichols sliced the numbers a different way, showing that Windows 8 is falling behind Windows Vista, as a month-by-month comparison of the launch shipments shows.
Windows 8 vs. Windows Vista
The parallels do look similar. Early reviews of Microsoft Vista describe it as an operating system that was nice to have, not a must-have; some, like PC World, called Windows Vista “fun to use”. (Doh!) Only Stephen Manes of Forbes called it like history did: “Vista is at best mildly annoying and at worst makes you want to rush to Redmond, Wash. and rip somebody’s liver out.” (Manes has since authored a book about ballet.)
The point is that as professional observers work to see both the positives and the negatives in a major revision of Windows revision, customer reaction is frequently less nuanced. And once the public collectively decides on the worth of a product, the conventional wisdom can be hard to overcome.
Windows 8 still has some momentum behind it, partly driven by the Microsoft spin machine and multimillion-dollar ad campaigns for the Surface tablet and Internet Explorer. And Microsoft has made no secret of the fact that if consumers are going to buy a Windows 8 tablet, they really should get a touchscreen.
So what’s really happening here? Is Windows 8 already a bust? The market share trends charted by Net Applications offer clues, but it’s too soon to tell for sure whether or not that little “hump” is a bump, a step or nothing much at all. But the latest discounts indicate that Microsoft is worried enough to sacrifice its margins to juice sales of smaller Windows 8 devices. Will it be enough to make a difference?
Image Source: Flickr/Ambernectar 13
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Well, this is disappointing.
As magazines make the transition from print to pixels, some publishers are using the move as an opportunity to jack up their prices – in some cases, to more than they were charging for print editions. And that’s for tablet versions that are too often crappy afterthoughts.
To be fair, magazines are contending with legitimate financial concerns. Their advertising revenue has been declining and the historically discounted subscription rates they’ve charged for print delivery just aren’t enough to pay the freight. To cope, many publishers are asking readers to chip in more – on digital versions as well as print editions.
There are some problems with driving up prices too much, though.
For one, everyone knows it’s cheaper to distribute content digitally than to print it and mail it. Asking buyers to pay more for something that costs you less to deliver is the kind of tactic that makes many subscribers feel exploited. It’s a head-scratcher, if not a subscription-canceler. Sure, magazine makers may still be coping with meaty legacy cost structures. But that’s not our problem, is it?
Readers Have Way More Choices
There’s also much more competition. Long gone are the days when magazines competed only with each other. Today, the entire Internet churns out content at a volume too great for any one human to keep up with – and it’s all instantly available at any time.
In addition to traditional magazines gone tablet, there are the digital-only magazines, sitting right there on the skeuomorphic newsstand shelf. For every frustrated TIME subscriber, there’s a free download of the Huffington magazine, not to mention personalized, social-fueled digital “magazines” from Flipboard, AOL Editions, Google Currents, Zite and an ever-growing list of others. If Wired jacks up its prices, there’s always digital mags from The Next Web and Engadet, not to mention the huge selection of tech coverage available through news aggregator apps and feed readers.
How Publishers Have Fared With Tablets
Not everyone in the publishing industry is enamored with the idea of publishing native tablet apps for readers to flip through. MIT Technology Review editor Jason Pontin vowed to kill his magazine’s native apps, citing high costs, technical challenges and the walled-off, un-Web-like nature of apps. The Financial Times famously pulled its iOS apps in favor of the HTML5 approach and isreportedly seeing more traffic and revenue since making the switch. Indeed, research has suggested that most readers prefer Web apps to native, platform-specific publications.
Still, some magazines have done pretty well with their digital editions, especially when they bundle them with print. In the United States, tablet publications are the second highest-grossing category of apps on iOS, according to an independent audit. Time and Conde Nast are selling the most digital mags, with news and women’s interest magazines dominating those sales.
Half of Wired‘s revenue now comes from digital, which is a rare but promising milestone for a legacy publisher. I still subscribe to Wired in print, and I appreciate the fact that the iPad edition comes at no extra charge. I also happily pay for Marco Arment’s experimental publication The Magazine, because it consistently publishes content I enjoy in relatively small doses, rather than flooding me with irrelevant features and full-page ads.
“The Magazine was profitable from day one,” says Arment. “As subscribers increased past break-even, I’ve been able to reinvest the additional income into more articles, higher author payments, original illustrations, photos and a professional editor.”
While Arment won’t disclose hard numbers, he says he’s satisfied with what he calls The Magazine’s “fantastic success.” By utilizing what publishing expert Craig Mod calls “compact publishing” and monetizing it fairly, Arment has managed to build a profitable, if small media business in an age when industry trend lines have the stubborn tendency to slide downward.
There’s clearly a limit to how much people will pay for magazine-style content. And it’s not at all clear that number is rising instead of falling. Folks who want to remain in the publishing business need to figure out a hybrid model that works, and not just jack up their prices to make up for shrinking subscriber rolls.
Digital Magazines Suck
The business model isn’t the only issue here. Just as important is the consensus that most digital magazines just aren’t very good. In far too many cases, subscribing to a magazine on your tablet means downloading a bloated, glorified PDF that hardly delivers the potentially magical experience the form factor allows. Even some of the digital-only magazines from online publishers mimic print page-for-page in disappointing pinch-to-zoom layouts.
There are some promising alternatives. Wired‘s iPad app is pretty print-centric but at least the editors go to the trouble of adding multimedia bells and whistles. The Magazine takes an attractive minimalistic approach – both in terms of publication design and pricing.
Traditional publishers may want to look to The Magazine for inspiration, as well as to social news aggregators like Flipboard and Zite, which have managed to produce truly addictive reading environments worthy of a slot in one’s home screen dock. Rethinking magazines for tablets will require publishers to get completely out of the print mindset. That means different layouts, lighter file sizes, deeper social integrations and yes, occasionally pointing readers toward content published by others.
On the whole, digital magazines have a long way to go. When they get there, those of us who are most hungry for the news, analysis and entertainment they provide will happily pay up. Hopefully, there will be enough of us to make the best digital magazines into viable businesses.
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Microsoft have just announced that the much anticipated Surface Pro will be released in January, starting at $899 for a 64GB version and $999 for the 128GB version. Both of these come with a Surface pen but the Touch Cover or Type Covers will be sold separately. Also, be aware that the device takes up [...]
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Apple Tuesday announced the fourth generation iPad, building on the power and features of the 10-inch Retina-display “New iPad” while maintaining the same prices and storage sizes. The 16GB, 32GB and 64GB models sell for $499, $599 and $699 respectively.
The fourth iPad doubles performance with a new A6X chip, it has an improved 720p front-facing FaceTime camera and better LTE cellular coverage. It sports the new, smaller Lightning connector, which debuted on the iPhone 5, and Apple offers Lightning-to-HDMI and Lightning-to-VGA adapters to let you send video out to your TV.
The updated hardware maintains the same 10-hour battery life Apple claims for the previous generation. That’s the trend Apple has tried to uphold for recent iPad and iPhone updates: better screens, more power, but the same battery life users have come to expect.
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Facebook has reported $1.26 billion in Q3 2012 revenue in their second reporting period as a public company, with a $59 million loss and adjusted profit of $0.12 a share. Immediately, share prices rose 8 percent in after-hours trading.
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Google has slashed the price of its Maps application programming interface (API). In a move to attract more enterprise use of the system, U.S. companies will now pay 50 cents instead of $4 for every thousand map loads, an 88 percent lower rate.
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Google is dramatically cutting prices for the heaviest developer-users of of its Maps API to keep them from defecting to other platforms. The company has slashed prices “from US $4 per 1,000 map loads to 50¢ per 1,000 map loads.” Since the new fees policy was instituted last Fall, there…
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