Lenovo pays Microsoft $1.3bn for software
The more the merrier
Lenovo will pay up to $1.3bn over the next year to pre-install Microsoft software on its computers. Of course, it is not really doing the paying: it is a Microsoft OEM and so is reselling passing the costs on, along with a little margin for itself, to its customers. So the more it pays Microsoft, the more it is making in PC sales and Office apps sell-throughs.
As China's biggest computer maker, Lenovo will occupy a special place in Microsoft's heart. This is a vast market, where most people pirate software. Lenovo is doing its bit to combat piracy in its home country. It says it was the first PC maker to pre-install Windows on all its PCs for the China market, making the move in November 2005. Selling PCs with pre-installed OSes is now a legal requirement in China, so It also waves the 'buy software' flag through marketing programs conducted in its retail stores in China.
The framework agreement with Microsoft, announced yesterday in San Francisco, was included in a group of commitments from Chinese bigwigs to buy at least $4.3bn in US technology. In a release announcing the deal, Lenovo did not say how much it is paying, but a spokesman mentioned the $1.3bn price tag to Reuters.
It seems unlikely to us that this amount is solely for Lenovo's Microsoft sales in China, but we are happy to be corrected, if wrong. ®
The £17 Vista link
Price is around £50-£60 for Vista Home Premium OEM ex VAT.
From a recent e-mail I've seen you can get a refund from Dell for any unwanted Vistas for the grand total of £17 each. Yup, seventeen quid!
I'm not if this is the true cost to Dell for a Vista OEM licence or if it's artifically lowered...
OEM price for Vista Home Premium in the UK approx £70, upgrade is £130, retail is £190.
Obviously the large manufactures do not pay this for OEM, as a guide when Dell did a rebate of Windows license if you could prove that you are not using it (in the US), rebate was approx $50 for XP Pro when at the time you would would be paying £70 for OEM through retail channel.
Mr. Coli is incorrect. Microsoft does have research labs in China and Britain, and it may or may not be outsourcing customer service. However, its software developers and testers are almost 100 percent located in Redmond WA.
A question that nobody has asked is what is the OEM price for Windows? It is far less than the price of a boxed copy of the OS, but you never see anyone quote it.