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Windows RT Will Cost OEMs Over Twice As Much as Windows 7 310

Posted by Unknown Lamer
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.
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Windows RT Will Cost OEMs Over Twice As Much as Windows 7

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  • by Anonymous Coward on Wednesday June 13, 2012 @09:31AM (#40308047)

    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)

    by Anonymous Coward on Wednesday June 13, 2012 @09:32AM (#40308059)

    Seems that Linux will finally get a chance.

  • by JDG1980 (2438906) on Wednesday June 13, 2012 @09:35AM (#40308095)

    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: (Score:3, Insightful)

      by Anonymous Coward

      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.

      • by Junta (36770)

        They are thinking they want to keep the same profits margins they have always had (which of course won't work)

        Actually, they aren't, they are seeking *more*. On top of the pricing change, I wager there is a lot of x86 crapware to recover the cost of the license on x86 systems, not so much with the ARM variant.

      • Setbacks are common for MS yet you don't see a revolving door of CEO at MS.

        This would be only the 2nd CEO to leave, not sure about you, but revolving door, this is not.

        I agree with GP that the avenue that MS is taking with 8 departs from the success built with 7. Windows 8 will piss off consumers because what they've been learning for years has become some crazy new system they have to learn, & business won't be able to adapt to the new system with their archaic group policies without building from the ground up. I really feel that if they're going to make the cheap tablet mar

    • by hmmm (115599) on Wednesday June 13, 2012 @09:48AM (#40308245)

      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.

      • by DarthVain (724186) on Wednesday June 13, 2012 @10:33AM (#40308765)

        Touch enabled devices does not mean specifically tablets or phones. MS has long seen their demise and plans to corner the touch enabled coffee table market. Truly they are visionaries!

      • by Sir_Sri (199544) on Wednesday June 13, 2012 @10:34AM (#40308793)

        It's possible they realize the folly of Windows RT and are trying to make it possible but not probable.

        It's not really clear who windows RT is actually going to be good for. It's clear who it's aimed at. But if the whole plan is to have a single windows 8 family why the hell would you buy the ugly incompatible step child of the family? That doesn't mean windows RT will be bad, or won't behave exactly the same from a user perspective as x86/IA64, at least until they go to install software and find out nothing works. But for a tablet the whole advantage of windows is that it runs windows software, if it's not going to run windows software... why would you want it?

        The fact that intel and AMD haven't really kicked into gear for mobile has hurt microsoft a lot. There should be x86 phones running well... actual windows. And there should have been for 5 or 6 years at this point. I have a 6 year old touch and pen enabled windows XP tablet that behaves pretty much exactly as you'd expect a touch device to, other than the whole having a fold out keyboard because it's a convertible laptop, and I have a touch enabled windows vista HP laptop thats about 4 years old that's the same deal.

        I'm still struggling to figure out what Windows RT is aimed at. Maybe it's for emerging markets and developers for emerging markets? It's possible they want regular windows as the main product line in rich countries, and poor ones that only get arm devices to have a cheap edition? Selling a cheap tablet to compete on price with the iPad in any market is a stupid plan if there's no software for it, which seems to be what windows RT would be, that's just going to make millions of customers angry, fast. Making a shitty product more expensive doesn't make it a better product, but it might make manufacturers think twice about trying to stuff it in every pile of bad hardware they can shovel out the door. But as you say... who whole strategy seems internally inconsistent.

        • by Bert64 (520050)

          Well, the problems for MS are...

          Aside from the fact that AMD/Intel haven't had competitive mobile cpus, x86 has more legacy cruft to carry around than ARM so all else (eg manufacturing process) being equal, ARM will always have an advantage.

          Windows also expects not just an x86 cpu, but an ibm compatible system... The really low power x86 designs are different enough that they are not compatible at the kernel level, linux has been modified to run on them but i don't believe windows has and it may cause probl

    • 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.

      Because there is time where Metro-Apps need to be built Microsoft needs to push the Intel Versions of its OS for a while, where peop

      • by JDG1980 (2438906) on Wednesday June 13, 2012 @10:00AM (#40308403)

        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.

        • The iPad 3 is $629 for the least expensive model with 3G/4G capability. WinRT tablets are going to be considerably more expensive.

          From the source's source, the "computex vendors" said models will start at $549 (not $600, which the source rounded to). That's $50 more expensive than the base model 16 GB iPad with no 3G. Without even knowing the specs, that's a phenomenal deal for someone like because Windows RT comes with the full Office preinstalled. If I want iWork on my iPad, that's another $30, and they aren't even full-featured office apps.

    • by Kjella (173770) on Wednesday June 13, 2012 @09:57AM (#40308353) Homepage

      They survived Vista so they'll survive Windows 8, Microsoft is far too entrenched to flop in one generation. Much like Intel when they were selling PIVs and Itanics, they still come back to be on top of the game. I run Windows 7, it works very well and with extended support even my Home Premium is supported until 2020. It's not like there's going to be a pressing need to use Win8 for many years yet, assuming it actually ends up that bad.

      • by Lonewolf666 (259450) on Wednesday June 13, 2012 @10:30AM (#40308729)

        Sure, Microsoft will survive on the desktop and on "classic" laptops. Windows 7 is good enough to keep them in business for those types of device, even if Windows 9 takes another five years to produce. Windows 7 will just become the new XP.

        But for touchscreen devices, Windows 7 is not fun to use as it is. Neither are most existing Windows applications. So Windows 8 (RT) starts from a difficult position and I could imagine the pricing as described is the final nail in its coffin.
        Which would give iOS and Android time until Windows 9 to get even more entrenched on smartphones and tablets. That cannot be good for Microsoft.

      • by symbolset (646467) * on Wednesday June 13, 2012 @10:35AM (#40308803) Journal
        When Vista launched there was no heir apparent. Now there are two.
    • It feels more like they are trying to kill ARM at an OEM level: "It's too expensive with Windows and no one wants it without" ... Of course, that thought is nonsense...but have you seen reason and sanity at work lately there?
      • by JDG1980 (2438906)

        It feels more like they are trying to kill ARM at an OEM level: "It's too expensive with Windows and no one wants it without" ... Of course, that thought is nonsense...but have you seen reason and sanity at work lately there?

        If they really are thinking that, they have delusions of grandeur. ARM existed before Microsoft had any products for it, and will continue to thrive after WinRT flops.

        Microsoft really needs to come to its senses and give up the 1990s-era delusion that they can own the whole IT market.

        • by jmorris42 (1458) *

          > Microsoft really needs to come to its senses..

          It is trying to survive. It will do ANYTHING.

          A publicly traded corporation has two paths to success.

          1. Growth. But you have to give the shareholders regular good news to drive the share price up and up. This was MSFT up to the .bomb crash.

          2. Dividends. A utility type. A monopoly with a saturated market like Microsoft currently exists as is a perfect example of one. Everyone needs em, they rake in nice healthy revenue and.... they aren't handing out

    • by Grayhand (2610049) on Wednesday June 13, 2012 @10:08AM (#40308485)

      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.

      I'm not saying I agree that Ballmer will be out soon but apparently they have removed all chairs from his office.

    • by symbolset (646467) *
      The only thing that disappoints me about Steve Ballmer's leadership is that it didn't begin five years sooner, so he could mark XP with his scent as well. I hope they keep him a long time.
    • by tobiasly (524456)

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

      While that would certainly be good for MSFT, I'm having loads of fun watching him run the company into the ground.

    • Well, look at it from Ballmer's standpoint. He thinks that the desktop / laptop markets are going to disappear (he really, really believes the bullsh*t that comes out of Marketing's 'This Shiny Thing is the hotness!' butthole), and is trying to maneuver the company into a financially stable long term position.

      The key here is that he really believes that the desktop / laptop markets are going to disappear. Feel free to take this *facepalm*, and apply it to your forehead.

  • Office included (Score:5, Interesting)

    by robmv (855035) on Wednesday June 13, 2012 @09:40AM (#40308145)

    Isn't Office included on Windows RT? I think that is the reason of that higher price, some big corporations have so disconnected divisions that each one demands their cut to meet their yearly quota and do not see the big picture

    • Quite possible. It may just be that someone is worried that giving away all these Office installations on tablets might cut into the demand for Office on conventional PCs and portables.
  • by alen (225700) on Wednesday June 13, 2012 @09:41AM (#40308155)

    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

    • by Renderer of Evil (604742) on Wednesday June 13, 2012 @10:01AM (#40308409) Homepage

      Lets be honest, this is about Office.

      Microsoft is still living in that fantasy land where MS Office is relevant or necessary to everyone with a computer.

      Apple's Pages and Google Docs cover about 95% of the consumer population. I'm not even mentioning all the 3rd party, dirt cheap apps which have carved out their niches and do some tasks far better without the pricetag or the bloat of Office suite.

      I do love unending analyst guarantees (10 year running) how Office is this one thing that will turn the tide by making Microsoft cool and relevant again. Then the kids will finally discover the joys of mail merge and start sharing their hip-hop playlists with their friends at the Microsoft store.

  • I'm forced to assume they set it so ludicrously high to make the inevitable OEM 'loyalty' discount impossible to resist. I can only hope they've misjudged this badly, that OEMs will decide to avoid Win8 rather than agree whatever restrictive terms (dropping Android?) come with that discount.

    • by vlm (69642)

      whatever restrictive terms (dropping Android?) come with that discount.

      My guess is the carrot will be 95% of the cost will be refunded if their secureboot implementation used to prevent linux or android from being installed is not broken.

      The day after a "crack" or whatever hits pirate bay so end users can install linux or android over the microsoft install, the refund disappears.

      Its an interesting anti-competitive tactic.

      • I wouldn't bet that. See, as long as the device ships and sells with a Microsoft product, I'm sure that company doesn't care and does sell it as a win.
  • Stupid if true (Score:4, Insightful)

    by Anonymous Coward on Wednesday June 13, 2012 @09:50AM (#40308275)

    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.

  • by Teun (17872)
    Microsoft, a commercial enterprise if there ever was one, has something new to sell and the market needs to guess the price.
    But then it's purely B2B and has nothing to do with the consumer...
  • Oh boy, do I want Windows 8 to be a massive failure!

    Unfortunately, I think that Microsoft has enough resources hedge their bets.
    Like when Intel (another giant) made the crappy Pentium 4, but they didn't collapse,
    because they had a team in Israel developing a good alternative micro-architecture.

    Still, I think we should concentrate efforts now - by evangelizing Ubuntu and Chrome/Firefox.

  • by jimicus (737525) on Wednesday June 13, 2012 @09:53AM (#40308321)

    Okay, this bit I don't get:

    It would seem that Microsoft doesn't want to flood the markets with cheap Windows RT tablets.

    If what we see on PC's is anything to go by, this sort of pricing strategy will have the exact opposite effect. Manufacturers will grit their teeth, pay Microsoft and then cut every other conceivable corner they can think of in order to build products down to a price.

  • by erp_consultant (2614861) on Wednesday June 13, 2012 @09:56AM (#40308349)
    $600 - $900 for a Windows tablet? Really? Good luck with that one Ballmer. Look - Apple is a premium brand so they can get away with charging what they do for the iPad. The android tablets are priced at a discount to that, presumably because the OS is free but also because the quality of components is not quite as good. On the ones I've used the touch screens don't seem to be quite as responsive as the iPad. In any case, where does this leave the Windows tablets? Selling at a premium to the iPad? I don't think so.
    • by Zocalo (252965)
      Corporates want an integrated user platform that they can manage from a single console. What they can save on support engineers, management tools, training and other expenses they perceive are associated with running multiple platforms might just be enough to justify and extra few hundred bucks a seat.
      • by MightyMartian (840721) on Wednesday June 13, 2012 @10:15AM (#40308565) Journal

        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.

      • by alen (225700)

        Apple has an enterprise deployment kit to deploy home grown apps to iOS devices without itunes

        and most of the crap that AD does like app security is being done by apple. if someone installs some app on the app store it won't screw up the device because each app has its own sandbox and can only access limited resources

      • Corporates? I think you mean IT departments in corporations. I don't know very many users that want this and recently the users have been winning more often than they used to.

      • by Tridus (79566)

        Corporates also want that shiny toy that the CEO sees his kid with and decides he should have one too.

        That's not a Windows tablet.

  • It sounds like maybe Microsoft's internal priesthood have finally gained a firm upper hand and are now letting their identity delusions fully dictate pricing decisions. So is this Windows for The Faithful now, and paying up to own a copy is really a tithe to the Church of Redmond? Yeah... I think I'll stick with secularism. When Windows 7 runs off the rails I hope I'll finally be prepped to make the switch to something else. I'll be damned if I'm doing Unity, but I'm sure as hell not doin' Metro either!

  • A premium price for Windows tablets would make sense if Microsoft plans to leverage their (strangle)hold on the business world. The argument would be "you know how to manage and secure Windows desktops. By paying this premium for Windows tablets, you get tablet devices that you can similarly control, thereby reducing Total Cost of Ownership."

    But that would mean Microsoft is abandoning, or at least substantially downplaying, the consumer, and ceding that ground to Android and iOS. That -would be- a bet-th

    • by JDG1980 (2438906)

      A premium price for Windows tablets would make sense if Microsoft plans to leverage their (strangle)hold on the business world. The argument would be "you know how to manage and secure Windows desktops. By paying this premium for Windows tablets, you get tablet devices that you can similarly control, thereby reducing Total Cost of Ownership."

      That plan would make sense... if Microsoft had implemented Active Directory on WinRT. The lack of this crucial IT management feature, which pretty much everyone in th

    • by jo_ham (604554)

      The problem with that is that these new tablets do not support AD. I'd at least think that would be an optional component, but it isn't.

    • Several people pointed out Win 8 Tablets don't support AD. Thanks, I didn't know that.

      But we've been here before! MSFT Win 8 Tablets not supporting AD is exactly like RIM Tablets not supporting Email. In both cases, the developer fscked up by ignoring their greatest strength for using and integrating their devices into corporate networks.

      (Queue "repeat lessons of history" quote...)

  • by tgd (2822) on Wednesday June 13, 2012 @10:06AM (#40308477)

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

    Win8 bundled with Office would cost more, too.

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

      Win8 bundled with Office would cost more, too.

      The correct information has no place in this latest opportunity for everyone to sound off about how bad Microsoft is!!

      • by hairyfeet (841228)

        Uhhh...friend? the biggest users of Office is corporate and without AD its a non starter, so just saying "We have Office!" don't mean shit when you are pushing a CONSUMER device. Do you honestly see many people going "Wow this ipad sure is nice, too bad it doesn't come with MS office, i could sure use me some Excel right about now" because i don't, because for consumers frankly Google docs does what they need.

        So having office alone doesn't justify the price. It would be like saying "Hey we have Outlook,

    • Why do they assume everybody wants Office? I sure don't.

    • by DragonWriter (970822) on Wednesday June 13, 2012 @11:42AM (#40309679)

      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.

  • Every year, hardware gets cheaper. They may be thinking that if the comsumer price point for the device is $400 and the hardware cost just dropped by $50, they can still charge that extra $50 to the consumer (via the OEM) and pocket the the profit. The price is still what the consumer was expecting, but MS just got richer.
  • You can buy wholesale, right now, Android 4.0 7" tablets with 1GB ram, 8GB storage, capacitive screens for $55 a piece.

    How are Windows tablet suppliers supposed to compete with Android when they're lumbered with a massive licence cost for the software? It's certainly not going to happen at the low end of the scale and it's hard to see how it can happen in the middle either.

    • by Microlith (54737)

      You can buy wholesale, right now, Android 4.0 7" tablets with 1GB ram, 8GB storage, capacitive screens for $55 a piece.

      You can, but they tend to be shit and come from vendors who are utterly incompetent at proper software adaptations and don't comply with the GPL for the kernel (let alone releasing any of the other sources.

  • by Impy the Impiuos Imp (442658) on Wednesday June 13, 2012 @10:37AM (#40308841) Journal

    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!"

  • Prong 2 is to make Android cost more by continuing to engage catspawns to sue the pants off of any OEMs who use it until they knuckle under and buy patent licenses.

    Oracle just took a swing and a miss, but they were burdened by a legacy of being in the business of making actual products. The next tranch of rabid puppets will be pure patent trolls with no history of reasonable behaviour to hold them back.

  • Let's do a little math here: Let's say you're a major hardware maker (Let's say.... Sony, since HP already has it's own tablet OS if they were smart enough to use it).

    You're planning to manufacture at least 100,000 units. At $80 per, that's 8 Million just to license the OS. Never mind the development of the hardware, the manufacture of the hardware, component costs, packaging and marketing.

    At some point, some bean-counter is going to consider that it is cheaper to buy another company that already has a tabl

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