Bloomberg: Microsoft To Reduce Windows Price 70% To Take On Rivals

(RTTNews) - Faced with competition from cheaper rivals, Microsoft Corp. (MSFT) is reducing the price of Windows 8.1 by 70 percent for manufacturers of low-cost computers and tablets , Bloomberg reported, quoting people familiar with the program.

Manufacturers will have to pay $15 to license Windows 8.1, instead of the normal fee of $50, and preinstall it on devices that are sold for less than $250.

The discount will be applicable to any product that meets the price limit, irrespective of the size or type of device.

With such offers for PC makers which are expected to accelerate sale of cheaper models, Microsoft may be able to increase its share of the $80 billion tablet market. The move may help the software giant stave off Chromebooks that use Google Inc. 's (GOOG) operating system.

Microsoft's devices and consumer licensing division, of which Windows software is a part, saw revenue decline last quarter, thanks to increased competition from Apple Inc. (AAPL) and Google. The computer industry also witnessed its biggest annual decline on record.

MSFT closed up 0.6 percent on Friday at $37.98.