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Windows RT Will Cost OEMs Over Twice As Much as Windows 7

Posted by Unknown on from the backroom-deals-with-intel dept.

MrSeb writes with this excerpt from Extreme Tech: "Good news: Last month's unbelievable rumors that a Windows RT (Windows 8 ARM) licenses would cost OEMs $90-100 were off the mark — in actual fact, as confirmed by multiple vendors at Computex in Taiwan, the Windows RT license cost is only $80-95. At this point, we're not entirely sure what Microsoft's plan for Windows RT is. It would seem that Microsoft doesn't want to flood the markets with cheap Windows RT tablets. At this rate, though, we would expect the cheapest Windows RT tablets to hit the market at around $600, with top-spec models (if they exist) in the $800-900 range — well above Android tablets or the iPad. We can only assume that Microsoft doesn't want to go head-to-head with iOS and Android, instead trying to stake out a position at the top end of the market. Whether this is a good plan, with x86 tablets and their full 20-year PC ecosystem also vying for market share, remains to be seen." For comparison, sources say that Windows Phone 7 ran OEMs the equivalent of $30 per device, and Windows 7 for desktops around $50.

23 of 310 comments (clear)

  1. Good news for AAPL investors by Anonymous Coward · · Score: 5, Insightful

    The iPad still has nothing to worry about. Does Microsoft secretly hold a ton of Apple stock? Are they just trying to make money by driving it up and then selling it?

    1. Re:Good news for AAPL investors by h4rr4r · · Score: 5, Insightful

      This will not work that way, the OEM will use lower quality tablet parts if they have to pay more for the OS. They will do this to get a competitive price and a reasonable profit margin. There are quite a few good android tablets out there, Samsung, Acer and Asus just off the top of my head all make more than one. Plus there is the fire and the nook for the lower end but still quite nice devices.

    2. Re:Good news for AAPL investors by fuzzyfuzzyfungus · · Score: 5, Insightful

      While I can understand that MS doesn't want 'Windows RT' associated with the sort of hardware that floats around on the dodgy end of the Android spectrum, it seems like pricing the software license as they have isn't an obviously helpful way to do that.

      If the OEM has to make a price point, because their customers or sales network says so, the money spent on software licenses will come out of something else(or, since Windows for x86 is apparently cheaper, simply cut a bloody swath through ARM devices and lead Intel to sell a bunch of Atoms...), which won't help hardware quality much.

      Given that they maintained a relatively iron grip over 'approved' specs for Windows Phone licencees(you either built the handset within certain parameters, or you didn't get a license, period.) it seems like that already have a template for a much better way to ensure uniform quality and a consistent experience.

      With this pricing strategy(along with the 'Ha Ha, no AD for you, not even with some sort of premium SKU" thing), one just gets the impression that they don't really want to sell this particular product...

    3. Re:Good news for AAPL investors by jmorris42 · · Score: 5, Insightful

      > one just gets the impression that they don't really want to sell this particular product...

      I think you are confused by trying to understand behavior that doesn't appear to make sense. Usually means we are missing part of the decision process. So lets toss theories around until one makes sense.

      Here is mine. Microsoft has a couple of long term problems. They have a monopoly on the desktop. It produces a shedload of cash. How much per unit is a secret somehow, odd that a large publicly traded corporation's flagship revenue stream's details are a closely guarded secret. (just an aside that may be significant) They fear the desktop might not stay so important and produce the revenue. But they have a second, equally important problem. They can't even stay the same, they have around 90% of the market and PC sales are flat, shareholders have been waiting patiently for a decade to see some share appreciation on MSFT and there doesn't appear to be a lot of upside on the Windows PC. They see Linux as a threat and we know shutting off the oxygen supply is a tactic that has worked for them. The open PC is the air supply.

      So Windows RT is designed to address all those needs. It answers the threat to the platform. It will produce Apple like per unit revenue which will make the pension fund managers smile. And it ends the Linux threat by carefully locking the platform and keeping a very tight leash on the OEMs.

      The question is whether the marketplace will allow them to get away with it. A lot of people have wanted to make insanely great margins on consumer electronics. Only one has succeeded. The chains are even questionable, phone vendors are removing them, not building stronger ones.

      --
      Democrat delenda est
    4. Re:Good news for AAPL investors by hairyfeet · · Score: 3, Insightful

      Well considering we are talking about a company with pretty much ZERO market share in tablets and cell phones to have the gold plated brass balls to think they can sell for more than iPad? To me this just shows Forbes is right, Ballmer IS the worst CEO out there.

      Both he and Sinofsky have shown how completely clueless they are, both of the actual people that buy their products and of the market in general. Did anybody see Sinofsky's last conference on Win 8? Count how many times the moron says the word "touchscreen". i swear that dumbass honestly thinks he is gonna get the ENTIRE X86 market to switch to touchscreens, all so he can sell an OS that so far nobody has shown any interest in!

      So if any MSFT execs read this? WinPhone was a FLOP, a MASSIVE FLOP that you spent hundreds of millions on that went exactly NOWHERE. I can tell you as a small retailer that the X86 version of Win 8 is looking to also be a MASSIVE FLOP with not a single customer that has played with the Win 8 CP unit in my shop expressing a desire to have your new OS. When you have had nothing but flops in an arena, and you competition which is NOT a flop is cheaper? That is NOT GOOD, that is horribly bad.

      Frankly if I didn't know any better I'd swear that just like everyone says Elop at Nokia was a MSFT plant, so too were Ballmer and Sinofsky Apple or Google plants, but for the future of the company they are actually much worse than that, they are truly clueless of their own customers and of the market they are trying to sell to. The only way I can see this possibly flying is if they do massive subsidies of the hardware, losing money on every single unit as they did with the X360 at the start, and hoping their massive capital can basically buy them a chunk of the market. More likely from the talks I've seen Sinofsky is so damned arrogant that he honestly believes people will pay $900 for a WOA tablet which i think come Xmas he's gonna get a massive shock, what he is gonna see is his new baby is gonna be the next touchpad.

      Gotta look on the bright side though, I have a feeling next summer Woot! is gonna be having massive sell offs of the turkeys and i bet the hardware will be nice so all of us who missed out on getting a touchpad will hopefully be able to score on for like $100 and the hackers will figure out a way to put Android on it.

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      ACs don't waste your time replying, your posts are never seen by me.
    5. Re:Good news for AAPL investors by hairyfeet · · Score: 4, Insightful

      Actually I would think it would be a better score for AMD than for Intel, as most tablets i've seen were used for portable PMPs and the AMD C and E series Bobcats are frankly perfect for that niche, much better than Atom now that Intel killed ION.

      As for the product itself...WHAT...THE...FUCK...I used to make Vista comparisons but now that I've been playing with Win 8 CP for awhile at the shop, I have to wonder if it isn't actually the next MS Bob. How can a company that is so famous for using focus groups out the ass suddenly come up with such a poorly designed product from the user perspective? want to see how the average user fares on Win 8? Here see for yourself and I can tell you that in my shop? that's the perfectly typical reaction, followed by frustration and them walking away.

      If the reports are accurate and Win8RT has no more support for AD and GPOs than an iPad I honestly can't see how it can do any better in that market as it doesn't really seem to follow tablet UI conventions either, its just not very intuitive or naturally discoverable. Charging premium prices when they couldn't give away WinPhone just cranks the WTF? knob to 11, as why would companies like Asus bend over backwards and pay crazy prices for an unproven product when they can get Android which IS a proven product, for free?

      That is why I have to make comparisons to MS Bob, because like Bob not only is the UI nothing like what folks are expecting (and at least in my shop are wanting) but I just can't see who the market this is supposed to be for. Its not business, as no AD makes it not any better than the more popular iPad, its not consumers who find it unintuitive, its not high end ARM tablet buyers as Asus with Transformer and Apple with iPad 3 seem to have that market covered, so who? people who want their tablet to LOOK like their desktop OS but not actualy run the same programs on the two? Its just a head scratcher.

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      ACs don't waste your time replying, your posts are never seen by me.
    6. Re:Good news for AAPL investors by Grishnakh · · Score: 3, Insightful

      Microsoft wants to associate its tablets with quality, and that is what they are.

      There's a big problem with this: in the consumer space, no one thinks "quality" when they think of Microsoft. Instead, that's exactly what they think of Apple. (How true this is is debateable, but we're talking about average consumers here, not geeks). And Apple already has a wildly popular tablet, the iPad. Why on earth would anyone pay more for a Windows tablet?

      Don't forget, Windows has always been about being cheap. People who wanted a PC and wanted a premium brand bought a Mac; everyone else, wanting something cheap, bought Windows. Windows has never been positioned as the high-end option, and it's built a 2-decade-long reputation of being low quality and crashing a lot (mainly due to the ridiculous variety of hardware and dodgy vendor-written drivers, compared to the Mac's single-vendor hardware). MS trying to jump into the tablet market with a high-priced offering (even higher priced than Apple's offering) is going to be a lot like Ford or Kia suddenly trying to sell cars in the Rolls Royce price range.

  2. Nice! by Anonymous Coward · · Score: 4, Insightful

    Seems that Linux will finally get a chance.

    1. Re:Nice! by jellomizer · · Score: 5, Insightful

      No it will just go to Apple and Android (Some people count Android as Linux, others do not)...

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    2. Re:Nice! by jo_ham · · Score: 4, Insightful

      To be fair though, OS X is a very heavily modded Unix based system that is a pretty far ways away from any *nix, aside from a handful of terminal commands.

      It *is* certified Unix though, despite what people say. At least, it was - I'm not sure if the more recent releases have been technically certified, but the kernel and BSD layers haven't changed drastically.

  3. What is Microsoft thinking? by JDG1980 · · Score: 5, Insightful

    So they're basically screwing up the desktop experience on Windows 8 in favor of tablets and smartphones, and on top of that they're pricing it so high that it won't have any reasonable chance of success in the market they want.

    I'm betting that Steve Ballmer will be out the door by the time all this is over.

    1. Re:What is Microsoft thinking? by Anonymous Coward · · Score: 3, Insightful

      They are thinking they want to keep the same profits margins they have always had (which of course won't work). It's pretty short sighted since they now have the windows apps market which means they can make much more through app sales then the OS itself.

      I highly doubt this would kick Ballmar out however. This isn't HP. Setbacks are common for MS yet you don't see a revolving door of CEO at MS.

    2. Re:What is Microsoft thinking? by hmmm · · Score: 5, Insightful

      I agree. They appear to be betting the company on Windows 8 in an attempt to capture the market for touch enabled devices, and are willing to risk alienating millions of their customers as a consequence. Why they wouldn't follow through on that strategy by all but giving away the RT licenses is beyond me. Windows 8 makes it clear that they are not willing to settle on becoming merely niche players in this market, whereas high pricing on licenses seems to indicate the reverse.

      Perhaps we have two parts of the company engaging in competing strategies, in which case responsibility for the mess would fall very squarely on Ballmer and senior management who should be setting the overall company strategy.

    3. Re:What is Microsoft thinking? by JDG1980 · · Score: 5, Insightful

      I think it is more of a cautious approach to entering the market. Price the OS, so that it will only be included on the high end Tablets (ones with faster processors and more memory) So when these go on the market they run very well and smooth. You don't want bad reviews out of the starting gate because the starting tables are just running of the systems minimum specifications.

      The problem with this argument is that WinRT will never even get "out of the starting gate" if the first devices are so grossly overpriced. This isn't a new market; Microsoft has to compete with Apple and Google, both of which have substantial installed bases. Apple, in particular, already has the premium tablet market sewn up, while Google's Android is found on a very wide array of devices and can be implemented at a very low price due to lack of licensing costs.

      Microsoft has to seriously consider, from the customer's perspective, why anyone would choose a WinRT tablet over an iPad 3. The iPad 3 is $629 for the least expensive model with 3G/4G capability. WinRT tablets are going to be considerably more expensive. The iPad 3 has a premium name, massive installed software base, and Retina Display. The WinRT tablet won't have any of these things. What's more, you will get some customers who think because it's called "Windows 8" that it can run normal Windows software, and they aren't going to be very happy when they find out that this is not true.

      The whole Windows 8 project is shaping up to be a failure greater even than Vista.

    4. Re:What is Microsoft thinking? by symbolset · · Score: 4, Insightful

      When Vista launched there was no heir apparent. Now there are two.

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    5. Re:What is Microsoft thinking? by JDG1980 · · Score: 3, Insightful

      Wrong. A tablet OS that can do actual office work, and produce media instead of just consuming it, is a new market. I'm fine with paying an extra $50 for a tablet OS that enables me to retouch photos with Photoshop, produce e-learning content with flash or html 5, and edit sound with Audacity. These things are impossible or slow and kludgy on IOS and Android devices.

      And it will still be impossible or slow or kludgy on a WinRT tablet. The problem isn't with the software, the problem is with the form factor. You need a keyboard and mouse to do this kind of work effectively.

  4. we are in the era of Good Enough by alen · · Score: 3, Insightful

    MS still doesn't get it, we are in the era of Good Enough Computing. my ipad 2 is not as powerful as my Lenovo, but i don't care. for a lot of things its more than good enough. most times i use my lenovo laptop the CPU is in the 5% range or less so it's not like i'm stressing it.

    and the form factor of the ipad allows it to have applications that are not available on my laptop. Flipboard for one as well as lots of educational apps for kids

  5. Stupid if true by Anonymous Coward · · Score: 4, Insightful

    If this news is accurate, then Microsoft is fairly stupid and we can be happy about it.

    They should license Windows RT for 10$, maximum 20$, and target the extreme low-cost segment. Heck, they should consider giving it away for free (for the time being). There is just no way a company can get a reasonable piece of the mobile market cake with their own proprietary operating system on the basis of primarily targeting high-end devices.

    Luxury customers are rare and Apple's quasi-monopoly is hard to break, especially not by Microsoft whose design decisions have historically always been dominated by completely tasteless marketing managers. Anyway, cheap masses is what wins in the long run, see PC vs. Apple.

  6. Re:iPad has nothing to worry about by MightyMartian · · Score: 3, Insightful

    Except that RT won't even be able to fully integrate into AD domains, so you won't even have the benefit of group policies and software distribution.

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    The world's burning. Moped Jesus spotted on I50. Details at 11.
  7. More "I can do it, too." by Impy+the+Impiuos+Imp · · Score: 3, Insightful

    Presumably there is a high level business executive at Microsoft saying, "Let's create an also-ran copycat tablet OS, charge way more money than the successful competitors with already huge markets, and dump billions into it. Obviously people will buy it because [unintelligible]. Sound good? It's a plan, then!"

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    (-1: Post disagrees with my already-settled worldview) is not a valid mod option.
  8. Windows RT is like iOS by tepples · · Score: 3, Insightful

    the need for AV on Microsoft products

    What need for antivirus? Windows RT runs only applications preinstalled on the device and applications obtained through the Windows Store unless you're a registered developer.

    1. Re:Windows RT is like iOS by JMJimmy · · Score: 4, Insightful

      I predict Windows 8 will be the largest clusterfuck yet and the walled garden approach will backfire on them in the most spectacular way.

  9. Re:WinRT comes with Office by DragonWriter · · Score: 3, Insightful

    All the reports say WinRT is including Office RT. Its as simple as that. WinRT comes with Office, so it costs more.

    That may be Microsoft's reasoning, but it doesn't change the impact on the minimum profitable selling price of a Win8RT tablet compared to, e.g., an Android tablet with similar hardware.

    And its hardly as if premium office suites with even retail prices in the range of the increase in the OEM price of Windows RT being attributed to office are things that tablet purchasers buy anywhere close to universally. So even if it Office RT is worth the price increase to people who would buy a tablet office suite, for a lot of purchasers there'll be no relevant benefit for the added costs.