The coming Windows 8 mini tablets: Netbooks revisited?

The coming Windows 8 mini tablets: Netbooks revisited?

Summary: Whether or not Microsoft is slashing prices it is charging PC makers to license Windows 8, will the coming generation of Windows 8 minis be little more than netbooks revisited?

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The Wall Street Journal reported earlier this week that according to its sources, Microsoft is offering its PC partners Windows 8 plus Office at a substantial discount -- $30 per copy price -- as opposed to the $120 one that they've supposedly been paying for Windows 8.

meetwindows8

This may not be the fire sale many are making it out to be -- though I'm not saying that because I believe Windows 8/Windows RT sales have been anything to write home about.

The WSJ  cited one unnamed person saying Microsoft is making the $30 per copy price available to its partners for use on PCs and tablets with screens of any size. But it also could be the case that the $30 price is only for the "mini" tablets with screen sizes under 10.8 inches that are expected to arrive later this year.

If $30 is the smaller-screen price only, this could be a case of Microsoft acknowledging the inevitable fact that smaller-screen devices tend to be cheaper than larger-screen PCs. In the old Windows-is-the-only-game-in-town days, Microsoft wouldn't have hesitated in charging PC makers $120 per copy for Windows even if it were to be housed in a $200-$300 device. In these post-PC/PC-plus days, that kind of pricing isn't realistic.

With Windows 7, Microsoft allegedly slashed the prices it was charging netbook makers for each copy of Windows. Microsoft did this because it was willing to do whatever it took to keep Linux from winning in that space. Maybe this is a parallel situation with Windows 8 and Microsoft is willing to hack the price it's charging OEMs to load Windows 8 on mini tablets to thwart Android.

Another possibility, as Paul Thurrott posited at the Windows SuperSite, is that the alleged $30 per copy cited by the WSJ might the price Microsoft is offering to mini-tablet makers for Windows RT (not 8) plus Office 2013 RT. Given fewer and fewer OEMs seem interested in getting on the Windows RT bandwagon, maybe the Softies are trying to use price as a Windows RT carrot.

Regardless of how and if Microsoft's Windows 8 OEM pricing is changing, I'm wondering what these coming Windows 8 mini tablets are going to look like. Will OEMs continue their race to the bottom? Will they be little more than cheaply made netbooks hidden under a touch screen? Or will these mini Windows 8 tablets come in around $500 or so -- in other words, around the same price as the Microsoft Surface RT (and hopefully more like the RT in terms of device quality)?

Remember: It was netbook sales that propped up Microsoft's Windows tallies, even as PC demand began to soften. While Microsoft no doubt would prefer to be able to charge PC makers as much as the market will bear per copy of Windows, a Windows 8 device sale is a Windows 8 device sale....

Topics: Windows 8, Microsoft, Tablets, PCs, Microsoft Surface

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • I think the second paragraph said it all

    "This may not be the fire sale many are making it out to be -- though I'm not saying that because I believe Windows 8/Windows RT sales have been anything to write home about.

    But is the handwriting on the wall already?
    Over and Out
    • Yes, and it's not good news

      The handwriting has indeed appeared on the wall, and it's not good news for Microsoft.
      Asok Smith
      • Just because you used a cliché

        doesn't mean it's true.

        I think, like with prior versions of Windows in the past, it's starts slow the first year, then takes off.

        I say this because I remember soooo many people saying those years ago something along the lines of "Windows XP is DOA. The handwriting has indeed appeared on the wall, and it's not good news for Microsoft."

        So you'll understand when I say many can't take your word for it. ;)
        William Farrel
        • yeah?

          How about a prediction, mr. farrel, for what windows 8 sales numbers will be by the end of 2013, and ditto 2014? And if sales turn out much lower, will you admit it's a failure?
          Eduardo_z
          • Wow

            Love my job, since I've been bringing in $5600… I sit at home, music playing while I work in front of my new iMac that I got now that I'm making it online.(Click Home information)
            http://goo.gl/zzsxn
            KatyPerry36
      • Game-set-match

        Microsoft - the next Kodak? I think I hear the fat lady singing!
        dbtinc
        • LMAO

          Far from it. This is a well diversified company they make a lot of money on other products. Besides, Windows will continue to be the darling of Business. You silly consumers think you're the only ones that matter!
          Rob.sharp
          • ......

            The issue is businesses are not adopting to windows 8 either. OS when you put the most money ever into a product that is failing at every possible aspect your company has had since coming out you are in trouble. Consumers obviously do not want anything to do with windows 8, pc makers hate it and see the more they use windows 8 the more sales drop, large businesses have no reason to update to it since it doesnt really fit the office and the lost productivity and retraining are unwanted costs, the smartphone market has shown almost no one is buying windows phones with the tiled ui.. Yes micrsoft has other options but with the current brain trust of Ballmer the company is indeed in big trouble. The rumors on the nex gen xbox may even hit them their as the rummors have things going on that gamers will not want such as the tiled ui on the console, streaming games only, no dvd ability, no backward compatibility andf your console only game allowance basically making it doa. Microsft needs to reboot fire Ballmer and actually listen to its consumer base or die off as a former great company killed by its own stupidity.
            Fletchguy
    • Reality Check......

      Lets see what are manufactures paying for Android. I got my calculator out....... Deep breath......... Nothing. That's right Android is free. So what we see here is Microsoft changing its strategy to comply with marker conditions.

      Ok now we need the calculator.

      Tablet X cost 200 to manufacture. We want to make 200 per tablet

      With android that's a $400 dollar tablet.

      Now with windows 8 at 100 a license its a $500 tablet

      We will assume consumer Y can count and choses the android tablet based on cost.

      To add to this Android is going to take your money by selling you apps later But consumer y does not care because he knows that there are some "free" and as we all know "crappy" apps he can download.

      Since Windows 8 has a market It can now turn a profit the same way However you can still install the better free apps you have been using since XP so that battle is a little up hill.
      xach
      • Lets see what are manufactures paying for Android

        "I got my calculator out....... Deep breath......... Nothing. That's right Android is free."

        What I had heard is that, manufacturers not only paying nothing to Google for using Android, they also get paid by Google for the clicks on Google search by the Android devices manufactured by them.
        ac1234555
        • linux and android

          Microsoft killed linux on netbooks, but then linux-based android clobbers windows on tablets. You know, this is like one of those movies where they keep putting a spike through the chest of the vampire, but it keeps coming back to life. That's because you can never kill an open source software project simply by denying it profits.
          Eduardo_z
          • It turned out Windows beat Linux on Netbooks

            They were just so much more useful. It doesn't seem out of the realm of possibility that the same would be true for tablets. I haven't gotten my paws on one yet, but I have a feeling that when I do it will be a well made, positive experience. I wonder if it could be as long lasting as my netbook. That thing is still great.

            Also, I would think that creating a Windows tablet would be much easier than creating an Android tablet, where you a forced to roll your own distribution.
            Schoolboy Bob
          • Windows on netbooks killed the form factor

            Netbooks were doing pretty well running linux - an OS that demanded little of hardware and was responsive even on small machines.
            Then MS started pressuring their OEMs to replace linux with XP and W7 - suddenly everyone started reporting that netbooks were underpowered and useless.
            Typical MS approach to innovation outside their labs - buy it or kill it.
            radleym
        • Android is free ...

          ... but if you want to ship an Android device running any of Google's additional apps, you, THE OEM, have to pay Google.

          As the OEM, you're also likely going to hear from Microsoft (and potentially others) who own patents that you've not licensed, so you are going to have to pay for those too.

          Don't forget to add your own in-house customizations, apps, etc. which will cost you a few $million a year to pay your dev/test/PM/support teams.

          So, no, in REALITY, Android is far from free.
          bitcrazed
          • Exactly

            "Don't forget to add your own in-house customizations, apps, etc. which will cost you a few $million a year to pay your dev/test/PM/support teams."

            I was just going to say pretty much exactly this. At least when an OEM buys a Windows license, they can be pretty much assured they'll be able to install it and it'll run without issue.

            Now I love Android, have an Android phone, tablet, TV stick and I put Android X86 on a small PC. But in almost every case, it's only been possible because a LOT of people have spent a LOT of time developing/hacking/porting/etc.

            While Android itself may be free, it takes a very skilled, experienced developer (if not a entire team) to get it running on a new device. And then that work must be repeated for each new version.

            Given these development costs, I'd be shocked if Android was actually less expensive than Windows.
            PC987
          • So windows is magically suited to all hardware?

            First, Bitcrazed, no they don't have to pay Google for the Google branded apps - they are FREE in the app store.

            Secondly, OEM's still have to spend at least as much developing drivers for Windows machines as they do for Android. Want to bet how difficult it is to develop drivers for Windows compared to linux?

            Thirdly, all manufacturers have to do to avoid the "millions" every year supporting and developing customizations is - don't customize! Android can be installed vanilla on any hardware, just like Google does with the Nexus.
            radleym
      • was willing to do whatever it took to keep Linux from winning in that space

        So Linux IS a threat.

        Good to know that '1%' keeps da windoze fanbuis on their toes.
        CaviarGreen
      • Not all manufacturers pay "nothing" for Android,

        there have been a number of articles on the web, even
        here at ZDNet, that report license fees paid by OEMs that
        choose Android...those fees aren't paid to Google, but
        to Microsoft for use of patented IP. So it's not totally
        free...if you want that, download one of the Linux
        distributions. I've been testing the new Slax 7 on my
        old Acer Aspire One netbook, and so far it has been a
        good little operating system. That widens my possibilities
        with this old netbook, may get a few more years use
        out of it.
        wizard57m-cnet
        • Its called "danegeld".

          They are just paying MS to not sue them just because the expenses of a lawsuit are greater than the danegeld.
          jessepollard
      • Android Costing Nothing

        I am not a particular fanboy for any technology but I understand that Microsoft gets $10 for each copy of android because of the patents it holds. There might also be other people that need intellectual property payments too. In addition the device manufacturers will have some ongoing costs modifying the raw android code to add on the additional programs they provide.

        So I suspect there are costs. The costs may even add up to pretty much the same license costs as Windowsphone.

        Of course cost and value are two different things. Consumers have seen great value in paying extra for Apple products despite the cost. Android tablets from China have been available at pretty low cost for a long time but have been a niche market. Android mobile devices are at many different price points. Production costs are factor and license costs are too. However the fact is that you can have a pretty good business on the sale of expensive desirable products even when the alternative is free. Just look at Ubuntu on the desktop - or rather the lack of it in mainstream computing despite the fact it is 'free'.
        Stephen Townsley