Filed Under:  U.S. & World

How Free Versions of Windows 10 May Affect Microsoft Stock

Contributed by on January 24, 2015 at 12:06 pm

Microsoft Headquarters in Redmond WashingtonMicrosoft has been able to keep its stock prices historically stable, despite continually emerging competition from younger tech firms. 2015, however, may well be a more volatile year the company is used to. It has recently been announced that Microsoft will make a very risky move by allowing many existing Windows users to receive the new Windows 10, a software intended to run on both computers and tablet devices, free of charge. It is estimated that this will cost the company in excess of $500 million worth of its annual revenue. The concept behind this move is that by offering free software, the company can create a greater degree of engagement with the consumer base and therefore stand to profit more from sales of other Microsoft products. While making a great deal of sense, this move is especially risky from the standpoint of shareholders, who see a certainty of revenue loss weighed against only the possibility of revenue gain.

There are, however, some very strong advantages currently held by Microsoft that will positively influence its stock. The highly anticipated Microsoft Hololens is poised to take control of the market for visual virtual reality processors, particularly with tech giant Google announcing the end of the beta phase for its similar product, the Google Glass. The company also plans to refocus its efforts on the sales of mobile devices, a market in which it has failed to perform up to now. The move to provide free mobile device software may well help to stimulate these device sales going forward.