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Windows RT tablets could cost $500 to $700

Analyst says suppliers are indicating prices at or above the iPad, too high to succeed in a crowded market

June 5, 2012 12:12 PM ET

Computerworld - 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.

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.

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