But the Redmond software giant is not sitting back and watching revenues drop passively, according to a report.
Digitimes said that Microsoft has struck deals with Taiwanese original design manufacturers (ODMs), who will introduce Windows notebooks at $179 at the end of this quarter.
That’s mostly a reaction to the Google Chromebook challenge. The same report said that Google has introduced a $99 Chromebook aimed at the educational market, and is using Rockchip semiconductors and cooperating with mainland Chinese vendors.
Digitimes said that Google has recently visited Taiwan to talk with Acer, Asustek and Quanta and wants to market the low cost Chromebook machines into emerging markets.
Microsoft is limited in its options. Operating system revenues contribute to its bottom line and even though it has dropped licensing fees for Windows, there is only so far it can go.