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Steve Ballmer wants you to pay more for your PC

Jul 31, 2009#1

Espy

After publicly advertising the idea that Windows PCs are cheaper than Macs in its "Laptop Hunter" ads, Microsoft CEO Steve Ballmer told an audience of financial analysts that the company's attempts to cut prices of Windows to induce demand in emerging markets had failed over the previous year, and that the solution to the company's woes will be to increase the price of computers.

"The theory was wrong," Ballmer said, explaining that there wasn't enough new demand to make up for the drop in profits. "You’ll see us address the theory. We’re going to readjust those prices north [using Windows 7]."

Reporting on the event, Peter Burrows of BusinessWeek wrote, "the company’s goal is to raise PC prices in the next year. That’s due both to expected popularity of a new class of higher-end and higher-priced netbooks, a new pricing strategy around Windows 7 that the company hopes will result in far more upgrades to premium SKUs, and a reversal of a strategy in the last year to cut prices to spur demand in emerging countries."

So what do you guys think? he wants to raise the prices of Netbooks and PC's in general. Will it work? Will the average user shell out 2 or 3000 bucks for a PC? Or will they want there 400 dollar Best Buy Super Saver deal?
Ballmer say:

EDIT: One other thing, why does it matter to Microsoft how much you pay for your PC? How does that help them?

Jul 31, 2009#2

bigcountry23

My understanding of this is that this will affect the price of PC's with windows installed, so they up what they charge to HP for copies of Windows that come installed on a new PC, who raises the price for thier PC's to compinsate and the increased price rolls down hill until it hits the consumers.

Jul 31, 2009#3

Denbrought

... I don't follow how they're exactly planning on doing that. With the ever rising number of computer-savyy friends, all they're going to manage is to enlarge the DIY (well, put together yourself) market -_-

Jul 31, 2009#4

Shegokigo

But I already pay 2000-3000 everytime I buy a new PC. :bush:

Jul 31, 2009#5

Shakey

I don't think he is talking about inflating the price of PC's to make them look more expensive/cool. What he's talking about is creating a more innovative product that contains more appealing features, and that will require an increase in price. There's nothing "cool" about a $500 dell. There are no interesting features. It just gets the job done, same with netbooks. A lot of people that buy netbooks end up being disappointing by the performance.

He's trying to encourage more innovative features that will make PC's more appealing. They see that people are willing to pay a premium for these features. That's what he wants.

The primary attack that comes from Apple is, hey, at the end of the day, we have the coolest hardware. When you see the hardware, the PC design that is am come out this Christmas with Windows 7, I think that conventional wisdom can begin to really change. There is some really amazing, amazing work. So it is possible to get great hardware innovation, even when hardware and software comes from separate companies.

Jul 31, 2009#6

Espy

Shakey said:
He's trying to encourage more innovative features that will make PC's more appealing. They see that people are willing to pay a premium for these features. That's what he wants.

That makes some sense, although I would worry that "innovative" will equal "gimmicky". He spent a lot of time about how many PC's have long used crappier hardware, so if he is referring to a hardware boost that's nice but you can already buy high end PC's.

Jul 31, 2009#7

figmentPez

Espy said:
EDIT: One other thing, why does it matter to Microsoft how much you pay for your PC? How does that help them?

The higher the price of the rest of the PC, the easier it is to hide the cost of Windows. $90 for Windows is less than 5% of a $2,000, but it's over a third of a $250 netbook (which is one reason that MS wants a netbook edition of Win7). Not that the WinXP on most netbooks costs $90, but I think that's a pretty accurate number for what smaller OEMs are paying for Vista Home Premium.

-- Fri Jul 31, 2009 3:33 pm --

Espy said:
so if he is referring to a hardware boost that's nice but you can already buy high end PC's.

Yes, people can buy higher end PCs, but they don't as much as they used to. 90% of laptops sold for over $1,000 are Macs. Getting more performance isn't a good enough reason for most people to spend more on a PC, because the performance of even cheap PCs is good enough for most users.

I'm not sure what it's going to take to make people buy new computers. Tablets are more expensive, but people don't seem to be flocking to those. Solid state drives don't offer much advantages that are clear to a casual user. People are idiots when it come to screen resolutions as it is. So, is it going to be 3D screens? Consumer versions of Surface? Integrated Xbox 720 with Project Natal? I have no idea.

Jul 31, 2009#8

Shakey

Espy said:
Shakey said:

He's trying to encourage more innovative features that will make PC's more appealing. They see that people are willing to pay a premium for these features. That's what he wants.

Click to expand...

That makes some sense, although I would worry that "innovative" will equal "gimmicky". He spent a lot of time about how many PC's have long used crappier hardware, so if he is referring to a hardware boost that's nice but you can already buy high end PC's.

But those high end PC's just have better hardware, nothing "special". Why would someone who isn't going to game buy a PC for more than $1000? They don't offer anything of use. I'm thinking along the lines of multitouch, and other hardware and software stuff Apple has made popular. I'm sure it will lead to some gimmicky stuff though.

Microsoft has been against low-end hardware for some time. They didn't even want to touch netbooks at first because of it.

Jul 31, 2009#9

sixpackshaker

So to spur innovation MS will put out a version of Win7 that will need more processing power and memory. That worked so well for the first 2 years of Vista and XP...

Here comes more bloatware from your friends at Microsoft.

Jul 31, 2009#10

Espy

sixpackshaker said:
So to spur innovation MS will put out a version of Win7 that will need more processing power and memory. That worked so well for the first 2 years of Vista and XP...

Here comes more bloatware from your friends at Microsoft.

AND YOU WILL LIKE IT!!!

Jul 31, 2009#11

figmentPez

sixpackshaker said:
So to spur innovation MS will put out a version of Win7 that will need more processing power and memory. That worked so well for the first 2 years of Vista and XP...

Here comes more bloatware from your friends at Microsoft.

Actually, I think it's going to be more along the lines of "more peripherals" than simply more bloatware.

Jul 31, 2009#12

Espy

figmentPez said:
Actually, I think it's going to be more along the lines of "more peripherals" than simply more bloatware.

Is that even possible? Have you tried to buy a computer through Dell? You have 1 page of hardware choices and then 8 BILLION PAGES of bullshit peripherals and bloatware.

Jul 31, 2009#13

figmentPez

Espy said:
Is that even possible? Have you tried to buy a computer through Dell? You have 1 page of hardware choices and then 8 BILLION PAGES of bullshit peripherals and bloatware.

Yeah, but printers, routers, etc aren't built-in and many people pass on them. Like webcams before they got integrated into almost every laptop. To raise PC prices it's going to have to be something similar. Something that becomes such an expected part of the computer bundle that people will look for it to be there, even if they're not sure they'll use it.

Jul 31, 2009#14

MindDetective

Espy said:
Will the average user shell out 2 or 3000 bucks for a PC?

Citation needed.

Jul 31, 2009#15

Denbrought

MindDetective said:
Espy said:

Will the average user shell out 2 or 3000 bucks for a PC?

Click to expand...

Citation needed.

Speculation doesn't require citation. Or a place in Halfopedia. Learn your guidelines

Jul 31, 2009#16

MindDetective

Denbrought said:
MindDetective said:

Espy said:

Will the average user shell out 2 or 3000 bucks for a PC?

Click to expand...

Citation needed.

Click to expand...

Speculation doesn't require citation. Or a place in Halfopedia. Learn your guidelines

Citation needed.

:tongue:

Aug 1, 2009#17

Espy

Denbrought said:
MindDetective said:

Espy said:

Will the average user shell out 2 or 3000 bucks for a PC?

Click to expand...

Citation needed.

Click to expand...

Speculation doesn't require citation. Or a place in Halfopedia. Learn your guidelines

Citation needed FAIL. :tongue:

In all seriousness though it seems that most people I know pay about 600-1500 for their pc's. So when someone talks about needed to raise prices it means, to me, probably wanting more of a 1000-2500 range, give or take a few hundred. Remember, Ballmer is spending a lot of time talking about Mac's and Mac prices, so I think he is seeing that people are willing to spend between 1000-3000 for their computer if it gives them good hardware and a good experience.

Aug 1, 2009#18

Chronos[Ha-G]

...glad I know how to build my own computers anyway...

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