Windows 8 Tablets Will Reportedly Cost More Than iPads

Microsoft may have been making "tablet PCs" since 2001, or at least providing support in Windows for hardware manufacturers who wanted to do so. Just like how the iPod blew open the "MP3 player" market, though, it was the iPad that made tablets a Thing in 2010, and send hardware vendors like HP and Asus scrambling to make their own versions.

Microsoft wants Windows 8 to give these vendors an edge. It sports a tablet-friendly "Metro" interface, a market intended to rival the App Store, and compatibility with Microsoft Office. Some Windows 8 tablets (the ones powered by Intel processors) will even be able to run other "desktop" apps -- the ones designed for old versions of Windows.

The bad news? A new report by Theo Valich of VR-Zone suggests that Windows 8 tablets may be priced between $549 and a whopping $899. There may be at least one tablet that costs less, however, for an unusual reason:

Windows 8 licensing fees

Google gives away its competing Android operating system for free to tablet makers, because its business model is making money from ads. (You don't even need Google's permission to use the open-source version of Android, although it doesn't come with the Google apps or Google Play store.) Microsoft, on the other hand, has always made money from charging hardware vendors a license fee for Windows. And according to Valich, that license fee is going to be in the neighborhood of $85, or nearly a fourth of the cost of last year's iPad 2.

Apple's monopolistic control of the world's highest-quality tablet components means Windows OEMs (original equipment manufacturers) will have to fight with Android tablet makers for what's left, which -- since it'd be cheaper -- may help drive costs down a bit. But even though Microsoft charges some Android hardware makers a euphemistically-termed license fee for Android (basically money to stave off a patent lawsuit), that fee is reportedly in the neighborhood of $5, rather than $85. And while Apple bears the cost of developing its own iOS operating system, Horace Dediu of Asymco estimates Apple's R&D costs at only about $11 per iPhone.

A cheaper Windows tablet?

Perhaps seeking to mimic Apple's strategy of controlling both hardware and software on its own devices -- or Microsoft's entertainment division's similar strategy, with the Xbox 360 game console -- Microsoft is reportedly planning to unveil its own tablet on Monday. The software giant obviously won't have to pay itself license fees, which may mean a more cost-competitive Windows tablet. If it's too cost-competitive, however, it may cause frustration for Microsoft's hardware partners, who would be competing with their own supplier.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.

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