At IFA, Microsoft counters Chromebooks, Android with dirt-cheap Windows devices

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The first shots in Microsoft's counterattack on Google's blossoming hardware business were officially fired at the IFA trade show in Berlin, a bombardment launched by a small army of Windows 8.1 laptops and tablets designed to counter Chrome OS and Android's most obvious threat: Price.

The blitz was no surprise. Assaulting an opponent as entrenched as Google requires months of careful preparation. Overtly, Microsoft tapped the Pawn Stars to whisper poisoned words about Chromebooks and their lack of desktop software compatibility as part of a Scroogled campaign. At its Windows Partner Conference in July, Microsoft vowed to compete for budget-priced devices.

Behind the scenes, the company rolled out Windows 8.1 with Bing—a version of Windows provided to device makers at no cost to counter the freely available nature of Chrome OS and Android—and retooled Windows to work on much skimpier hardware than before. A sweeping spring update made Windows 8.1 capable of running on devices with a mere 1GB of RAM and 16GB of storage, essentially halving previous requirements.

Lower specs mean cheaper prices for Windows devices, doubly so when combined with a newly free operating system. And now, Microsoft and its partners are unleashing their barrage.

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Asus' $200 EeeBook is a Chromebook killer with netbook roots.

HP teased the $200 Stream 14 laptop in July, and it was joined at IFA by Asus' Chromebook killer, the $200 EeeBook—the revival of the EeePC brand that kicked off the netbook craze. Each offers ho-hum hardware and displays, but so do most Chromebooks. In fact, the Stream 14 looks largely to be HP's Chromebook 14 with Windows 8.1 baked in rather than Chrome OS, though its specs have yet to be officially announced.

Low-cost laptops are nothing new, of course, though we've rarely seen Windows PCs drop below the $250 level before. But competitively priced Windows tablets are finally rearing their heads for the first time at IFA after years of being devastated by Android in the price wars. Archos and Acer each revealed 8-inch Windows tablets priced at $150, while Toshiba's 7-inch Encore Mini is expected to hit sub-$100 street prices despite a $120 debut.

Most of these low-cost Windows 8.1 PCs and tablets come with free 1-year subscriptions to Microsoft Office 365 and OneDrive cloud storage to boot, making the deals even more enticing (even if Microsoft no doubt hopes you'll pay to renew those service subscriptions at the end of the year).

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Toshiba's 7-inch, $120 (or less) Encore Mini tablet.

This isn't the first time Microsoft has moved to counter an attack from would-be usurpers, either.

"Microsoft has cut prices historically to meet a competitive threat," says Patrick Moorhead, founder and principal analyst at Moor Insights and Strategy, told PCWorld in an interview earlier this year. "Linux-based netbooks threatened Windows, and Microsoft offered Windows XP at a cut rate price—so this move versus Chromebooks makes sense."

Will the lower sticker cost of this new breed of Windows devices jumpstart the faltering PC market and Microsoft's thus-far failed attempt to crack the tablet market? That remains to be seen. Even Microsoft's own hardware partners are hedging their bets, releasing new Chromebooks and Android tablets right alongside Windows-based alternatives. But for the first time in this era of low-cost Google hardware, Microsoft's finally fighting on a level pricing play field.

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