Windows RT Will Cost OEMs Over Twice As Much as Windows 7 310
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.
Good news for AAPL investors (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?
Nice! (Score:4, Insightful)
Seems that Linux will finally get a chance.
What is Microsoft thinking? (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.
Re:Nice! (Score:5, Insightful)
No it will just go to Apple and Android (Some people count Android as Linux, others do not)...
Re:What is Microsoft thinking? (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.
we are in the era of Good Enough (Score:4, 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
Re:What is Microsoft thinking? (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.
Stupid if true (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.
Re:Good news for AAPL investors (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.
Re:Good news for AAPL investors (Score:5, Insightful)
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...
Re:What is Microsoft thinking? (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.
Re:iPad has nothing to worry about (Score:4, 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.
Re:Good news for AAPL investors (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.
Re:What is Microsoft thinking? (Score:5, Insightful)
More "I can do it, too." (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!"
Windows RT is like iOS (Score:4, 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.
Re:Nice! (Score:5, 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.
Re:Windows RT is like iOS (Score:5, 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.
Comment removed (Score:4, Insightful)
Re:WinRT comes with Office (Score:4, Insightful)
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.
Comment removed (Score:5, Insightful)
Re:What is Microsoft thinking? (Score:4, 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.
Re:Good news for AAPL investors (Score:4, 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.