Windows 8 Tablets Could Cost $500 to $700

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Windows RT tablets could cost $500 to $700 -- too high to make them viable in a market filled with less expensive tablets, according to an IDC analyst.

Windows RT tablets could cost $500 to $700 -- too high to make them viable in a market filled with less expensive tablets, according to an IDC analyst who researched costs with device manufacturers and component suppliers.

"My biggest concern is that Windows RT tablets could be many times more expensive than the Amazon Fire price of $200 -- even something as high as $599 and above, which is a concern for their viability," said IDC analyst Tom Mainelli, in a telephone interview.

That level of pricing for Windows RT tablets "feels like [they are] a non-starter," he added.

(Windows RT is an expression used to refer to a version of the Windows 8 operating system that runs on the ARM microprocessor.)

Like other analysts, Mainelli is impressed that Windows RT tablets like the 10.1-in. Asus Tablet 600 announced at Computex on Monday will include Office 15 productivity apps at no added cost. Windows RT will run on ARM processors, which are widely used in smartphones, unlike Windows 8 tablets, which are based on X86 processors from Intel and AMD and others.

"Windows RT running Office could be a pretty compelling product, but if you get in the $500 to $700 range, you are competing with Apple's iPad and the coming Windows 8 tablets [on X86]," Mainelli said. The iPad starts at $499.

"Plus, we don't yet know all the full benefits of Windows RT, but one thing we know is that it won't run all the Windows apps we are all used to running," he added.

To reaching his estimate of a $500 to $700 price for a a Windows RT tablet, Mainelli said IDC talked to many component suppliers, mainly in Asia, and ODMs (original design manufacturers) about the bill of materials (BOM) required to make a Windows RT tablet .

"Part of that cost is the Microsoft pricing for the OS, which Microsoft thought it could sell at a higher price [than normal] -- which might not be a bad idea," Mainelli said. "But [Microsoft's price] makes it pretty difficult for the hardware guys who are trying to compete with a $200 tablet, and then have to spend another $100, perhaps, for the OS." Mainelli said he's not sure of the accuracy of the added $100, but added, "the price is not as low as we expected."

Microsoft is not commenting on many Windows RT details, and Asus didn't specify a price or when its Tablet 600 would ship.

The Asus tablet includes 2GB of RAM and features such as an Nvidia quad-core Tegra 3 chip that show it could cost more than a low-end Kindle Fire, Mainelli said. "We are getting very few details, but the Windows 8 touch-based interface has strict specification requirements around touch, which means you can't go low end," he said.

In a video of the Asus Tablet 600 posted by Nvidia on its blog, a presenter notes that Nvidia will have the only quad-core processor for Windows RT when the tablets ship. Qualcomm also provided a glimpse of a dual-core Snapdragon s4 processor inside a reference Windows RT tablet at Computex.

Analysts generally say that Windows RT tablets can ship by October to take advantage of holiday sales, but Microsoft and various manufacturers aren't confirming that. Acer President Jim Wong said Monday that Acer will ship Windows RT tablets in the first quarter of 2013, for example.

Aside from Mainelli, other analysts, such as Jack Gold of J. Gold Associates, have speculated that Windows RT tablets could sell in the $300 range, while Rob Enderle of Enderle Group on Monday said they could sell closer to the iPad price, starting at $499.

While Windows RT has excited some analysts with the first previews at Computex, others are less enthusiastic. "I don't hold out much hope for Windows RT," said Zeus Kerravala, an analyst at ZK Research.

"The Windows RT OS itself is fine, but the tablet war is so heavily skewed toward Apple right now that Microsoft would have to come up with something so substantially better," he added. "And that's hard for me to see."

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