Microsoft: Windows 10 Free Upgrade Is A Marketing And Promotional Activity

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Back in January, Microsoft announced that Windows 10 will be a free upgrade to all existing users of Windows 7 and Windows 8. While many of us may think that Microsoft will be losing lots of revenue of because of this announcement, Microsoft considers it as a marketing and promotional activity. In the Form 10-Q filing, Microsoft has described this program as below.

In January 2015, we announced Windows 10 will be free to all qualified existing users of Windows 7 and Windows 8. This offer differs from historical offers preceding the launch of new versions of Windows as it is being made available for free to existing users in addition to new customers after the offer announcement. We evaluated the nature and accounting treatment of the Windows 10 offer and determined that it represents a marketing and promotional activity, in part because the offer is being made available for free to existing users. As this is a marketing and promotional activity, revenue recognition of new sales of Windows 8 will continue to be recognized as delivered.

Source: SEC via: CW

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