from Hacker News

Goodbye cheap Windows 8 tablets: Windows RT costs OEMs $85 a pop

by hinathan on 6/12/12, 11:21 PM with 59 comments

• by SlipperySlope on 6/13/12, 12:33 AM

  Microsoft is afraid to cross the chasm. It must become a hardware manufacturer to compete with iPad.

  The iPad has disrupted the steady decades-long growth of PC sales. Microsoft has the choice of competing with Android on the tablet low end, or of competing with Apple on the tablet high end.

  But because Microsoft is a software manufacturer, competing with Android on the low end means competing with something that is free - aside from existing mobile patent royalties.

  And competing with Apple is difficult because Apple keeps all the device sales profits, whereas Microsoft must split profits with tablet hardware manufacturers - who have the choice of using Android or some other Linux-based tablet OS.

  By the summer of 2013, we will begin to see how this is sorting out. Nokia, who has bet their company on Microsoft, may be then only a year away from bankruptcy. Enterprises may be reluctant to upgrade desktops to the Metro UI in Windows 8.

  What will be Microsoft's tablet market share a year from now? More than 10%?

• by krschultz on 6/13/12, 12:09 AM

  Windows 8 tablets can't sell for $800 or $900. I don't care what the tablets cost the manufacturers to make and license, they simply won't sell any for that price.

  It may well be more featured packed and powerful than an iPad - but it will be the premium product. At that price it will be pretty damn close to the price of a Macbook Air or Ultrabook which aren't any more arduous to carry. The only advantage of a tablet of those notebooks is the form factor. So how many people are out there looking for the form factor of a tablet but find the iPad's specs constraining?

• by ScottWhigham on 6/13/12, 12:52 AM

  I'm surprised at everyone quoting the same line and no one crying, "Foul!":

  "the new iPad starts at $500. Premium Windows 8 tablets will likely run between $800 and $900."

  Well, what's the "Premium iPad" go for? What do Windows 8 tablets start at? It's like saying "The entry level Mercedes goes for $50,000. The premium Porsche will likely run between $100,000 and $140,000." In that example, both can cost the same - it's all in the options/model chosen.

  I don't know what the actual prices of the Windows 8 tablets will be but I'm assuming Microsoft hasn't made their entry-level product 40% more expensive than the iPad.

• by nekojima on 6/12/12, 11:45 PM

  "the new iPad starts at $500. Premium Windows 8 tablets will likely run between $800 and $900."

  Which is why I am more than happy to stick with a much more functional & useful laptop, that's slim and has a long battery life. With the added bonus of a built-in cover for the screen, without having to add a bulky cover for that protection.

• by hinathan on 6/12/12, 11:24 PM

  I'm a little baffled by the pricing here — Microsoft's goal in the desktop world seemed to more or less break even on OS and push the application suite for the real cash.

  Does anyone have a sense of whether this makes sense at all? Perhaps the 'preferred volume OEM' terms are hugely discounted.

• by Kilimanjaro on 6/13/12, 12:41 AM

  With Mountain Lion at $19 the trend in software prices continues to go down year after year, propelled by the open source movement. In ten years I'd prefer to be in Apple's shoes.

  Software can be copied, pirated, or built up from scratch with an editor. Hardware can not.

• by makecheck on 6/13/12, 12:56 AM

  After years I still fail to understand how Microsoft thinks an OS is worth the prices it charges. I see two possibilities:

  1. The OS isn't worth this, in which case it's either extortion (if their partners feel they have no choice) or cluelessness (if their partners end up walking away).

  2. The OS is worth this, in which case they've over-engineered: they made their particular OS do way more than it's supposed to and are trying to recoup the cost of developing so damned much.

  Fundamentally, an OS needs to boot a device and provide resource management. In order to be compelling to developers it needs to include good libraries that make common tasks easy and tricky tasks efficient. ARM tablets don't even need Windows' backward-compatibility, so there should be a heck of a lot they can just drop out of it! It is hard to imagine this OS being a beast; apparently it is.

  Technical points aside however, Microsoft is also the underdog, and a rich one. If anybody should be eating the true costs of an OS and charging partners $6 a head to boost adoption (whether or not it's worth $85), it's Microsoft.

• by fingerprinter on 6/13/12, 1:21 AM

  Haven't seen anyone ask this, but is this also going to be the OEM price for say Dell, Lenovo etc for desktops and laptops? In a business with as slim margins as those folks have, this could scream for an alternative.

  Ubuntu anyone?

• by ajaimk on 6/13/12, 2:32 AM

  I wish the cheap was in brackets, as this spells doom for profit margins completely for OEMs. They don't have the scale of Apple.

• by cooldeal on 6/13/12, 1:02 AM

  OEMs are going to get kickbacks from Microsoft.

  http://www.neowin.net/news/microsoft-rumored-to-give-pc-make...

  That should drive the prices down a bit.

  > While this opens a path for more impressive devices, it seems to us that Microsoft and Intel both took the Ultrabook route and charge “an arm and a leg” for the RT-powered tablet.

  What? Intel is charging for an Windows RT ARM tablet?