Windows 8 tablets to be much cheaper with ARM chips, Lenovo exec claims

Windows 8 tablets to be much cheaper with ARM chips, Lenovo exec claims

Summary: The Chinese manufacturer's North American chief has said Windows RT tablets will cost as much as $300 less than their Intel-based counterparts, due to aggressive pricing for consumers


ARM-based Windows 8 tablets will be as much as £191 cheaper than their Intel-based counterparts, the manufacturer Lenovo has said.

Windows RT tablets
Lenovo has hinted that Windows RT tablets may cost between $200-300.

Lenovo's North American chief David Schmoock told Bloomberg on Thursday that devices running Windows RT would be between $200-$300 (£127-£191) less expensive than those running the more traditional version of Windows 8. He said Windows RT computers would have "very aggressive price points" to make them attractive to consumers.

Schmoock suggested that Intel-based Windows 8 tablets would be priced at around $600-$700, which could put the cheapest Windows RT tablets at around $300 — $100 more expensive than Google's entry-level Nexus 7 Android tablet, but the same amount cheaper than Apple's lowest-specced iPad.

The Lenovo executive also said that Intel's Ultrabook drive was not paying off as well as the chipmaker intended. Schmoock said the thin laptops were likely to get a 20-25 percent share of the consumer notebook market by the end of the year, rather than Intel's projection of 40 percent.

The Chinese manufacturer is primed to become the PC market leader, and it will also be one of the first to put out Windows RT devices, reportedly including a convertible tablet.

Topics: Lenovo, Microsoft, Tablets, Windows

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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  • Microsoft Will Ensure That "Cheap" = "Feature-Limited"

    Microsoft of course will absolutely guarantee that cheaper products will not cannibalize sales of more expensive ones. That means it cannot allow the cheaper ARM tablets to be seen as anywhere close to feature parity with pricier x86 ones.

    That will leave the door wide open for Android and other Linuxes to to completely eat its lunch on ARM. Which is what they have been doing anyway.
    • I'd love to see your proof

      If you have any, that is.
      Michael Alan Goff
      • Look at Skype

        No group video. You can't record calls or record video.

        All of this is available with Google Voice and Google Plus Hangouts.
        • Okay

          So what product does Microsoft have that has group chat, and was that ability removed when Skype became a Microsoft property? Or did it just lack it the entire time?
          Michael Alan Goff
          • OCS?

            Office Communicator has group chat. Not sure if it is has been issued in "app" (as opposed to application) form.
    • The missing feature in Windows RT (Arm)...

      ... is support for existing Win32 apps. This would have been technically easy to include, although it would have required developers to recompile their Win32 apps for Arm.

      Since neither the iPad nor Android tablets can run existing Win32 apps, the key limitation of Windows RT doesn't help them at all. On the contary, since Windows RT does run a small subset of Win32 apps, including MS Office, Arm-based Windows tablets have still got an advantage over iOS/Android tablets -- just a smaller one than Intel-based Windows tablets have got.
      • Win32...

        Is actually in there. Microsoft gets to use Win32 on ARM. No one else.

        It's about control... Microsoft wants the same kind of control Apple has on iOS, but they're actually baking it in. The WinRT API simply doesn't allow some of the things Microsoft wants to keep to themselves -- like the ability to transform data into code (need to run a modern Just-In-Time compiler, which you need to make otherwise-interpreted languages like Javascript run fast).

        So in reality, a Windows RT tablet is "Windows" only in the sense of the brand name... it' s no more compatible with what we all recognize as Windows, or what developers have built for decades as Windows applications, than iOS or Android.
        • If it isn't touch screen, it's obsolete.

          Apple and Microsoft know this already. Both companies are moving to an OS that is touch screen native. Whose putting it on the market first?

          Going forward, Windows 8 for RT and Windows 8 for Intel are going to be compatible with each other.
          What's the point of sticking to obsolete software that won't work with touchscreens? You are going to have to make the break eventually.
  • People are going to be so unhappy

    when they buy a "Windows" laptop and it won't run any of their Windows applications, and they can't figure out how to use it. The return rate on these things will be astronomical.
    • You must not understand

      ANY ndows Laptop will run all existing Windows applications and all the new Metro ones as well. All intel based tablets will do the same. Only the ARM tablets will not run desktop applications--although they will run a limited desktop versions of Office. They will however run a Metro Version of One Note. The key to success of the RT only tablets will be availability of apps and the price. I will probably buy one of each. One to consume and one to create. The Intel version runs Windows 8 Pro on a chip. Arm tablets should be considerably cheaper than those with the desktop-for one thing they only have RT on them and not the desktop. The chips are cheaper, the battery smaller. I will say that it is true that unless some major education effort, some will probably buy an RT tablet thinking they will be able to run photoshop. They will be able to run excel, word, power point, though.
      • And the current plan...

        Last word from Microsoft that I caught, anyway, is that both Windows RT and Office are to come on every Windows RT system. It will be a scaled down, finger friendly Office, but it's not a complete rewrite, since MS can still use Win32.

        The significance of this isn't that you can get Office. While some users are very strict about Office use, the whole lock-in with Office ain't what it used to be. And it remains to be seen just how "Office" this is.

        No, what's significant is that OEMs are going to have to pay for Windows and for Office. That could run $75-$100, unless Microsoft delivered a very different pricing schedule for Windows RT. That 20-25% of the proper market price for one of these tablets. And only Microsoft will have the ability to include all that without the per-unit fees. They'll be at a significant price advantage -- that's the thing that has all the OEMs angry.

        On the other hand, when you look at Apple and Android, it's hard to imagine anyone being able to compete using the typical Windows pricing scheme. At least not yet, because there's actual work to do to deliver a tablet... PCs are cheap because most OEMs don't actually make them, they just place an order for a specific set of features and get the boards made by the same CMs who make everyone else's PCBs. They're just system integrators, so they can live with the tiny margins.

        And Apple's not really going to crush anyone on price -- they prefer the high profits, and that's likely to remain as long as the Apple brand can get a premium over pretty much everyone else. No reason to kill that golden calf. Look at Mac business... Macs were 4.8% of the global market last year and maybe 5.2% of the global desktop market this year. And only about 14% of Apple's business last quarter. But Apple's making about 5x the profit of anyone else on each Mac, selling them at about twice the MSRP, selling more stuff, like "laptop for the desktop" iMacs, etc. That has Apple making money as if they sold 1/4 of all PCs sold (and more like 1/2 of all PCs, profit-wise, in the USA). They'd could never actually hit those numbers, so there's no advantage to a price drop.

        But Microsoft has to figure out how to sell Windows RT tablets. And to date, no one's done very well going up against Apple directly, price for price. Apple's established themselves as a luxury brand, like Gucci, Mercedes, Louis Vuitton, etc. No other CE or PC company is at that level today (Sony was... decades ago). So when Motorola or Samsung or LG introduce a $500 tablet against Apple's $500 tablet, they better be selling something more, or they'll fall flat on the face. And so far, mostly that latter thing. Just like their laptops... the cheapest Apple laptop is about $1000... the average full laptop in the USA last year sold for $485. Windows RT tablets need to target the $200-$350 range as an entry level. Which is going to make paying Microsoft a HUGE problem. Unless you ARE Microsoft.
        • Accounting realities

          The Windows RT operating system isn't "free" on machines manufactured under the Microsoft brand. There is a cost that was involved in developing the OS...and that must be amortized in the form of a license cost for all items sold. If they do not do so, the result will be a major loss, much to the ire of their investors. I really don't see them doing this, not only does it but an unfair burden on their OEMs (who would have to take a similar loss to compete), but would also subject them to more antitrust lawsuits.

          With Microsoft having control of their own app store, however, they will profit more (and continually) from each RT tablet sold, regardless of the OEM. This is another reason for them to maintain parity. Microsoft will profit equally no matter who sells the tablet; their own device merely sets a standard which OEMs are expected to meet or exceed (much like Google Nexus devices).

          OEMs do not pay anywhere near the retail price for software. Tablet hardware is cheaper than laptop hardware -- so the end product ought to be cheaper too. Microsoft is not going to geld their cash cow by pricing the OS at an excessive price compared with historic rates.
      • In all reality

        they know they can't, but will pretend and try to. Then will curse Microsoft for 3 or 4 decades for their failings.
    • Like how ipads have an astronomical return rate because

      users quickly figured out they couldnt run macos apps on them? You must be playing with your joystick too much
      Johnny Vegas
  • They're still in dreamland

    Have these guys looked at the parts breakdown for a 9.7" iPad and how much it's costing Apple to build ($316)? Or how much a smaller 7" Kindle Fire is costing Amazon to build ($200).

    Maybe they're planing on using cheap low res screens and junky netbook parts for these tablets.
    • Well, since they ARE making an RT device...

      Since Lenovo is making both ARM and intel-based windows 8 devices, and the ARE LENOVO, I think they might be more knowledgeable about and wholesale parts pricing, and device manufacturing than you or I.
    • Yep thats exactly why lenovo pays you the big bucks... oh wait

      First it doesnt cost apple nearly as much to build any model of the ipad now as it did a year ago, let alone when they first came out. Even more so with amazon. Second the lenovos arent going for quite the dpi. Third lenovo has much better grasp of manufacturing than apple does and isn't having to factor in foxconn profits. Forth lenovo doesnt have to make a dime or even break even on these if it first wants to use them as wedges to get their ultrabooks in the door and gain marketshare.
      Johnny Vegas
      • No free lunch, not from column A and not from column B

        Please stop with the "doesn't have to factor in FoxConn profits." That's the same line as the one that says Microsoft doesn't have to pay for a Windows license on Surface units. It implies that these companies run huge capital and labor intensive operations for free. Lenovo cannot run its factories at zero return any more than Microsoft can get coders to work for free. Lenovo has to buy its buildings and equipment at pretty much the same prices FoxConn pays. It has to pay its workers. And it has to provide a return on capital to its investors... you know, that pesky "profit" that you claim Lenovo doesn't need to have on all the billions in assets they have invested in property, plant, and equipment.

        That whole line of reasoning is bogus. Leave it behind. Business is ultimately about return on assets, and it doesn't matter whether the assets are all in one vertically-integrated monolith or spread across a global supply chain made up of specialty companies. Each process step has assets in it, and each step has to make a return.
        Robert Hahn
        • Not as much though

          I would think that since the plant is part of the company it has to contribute to the proffitability not turn its own profit. Every company has to factor in not being able to sell at full speed. That adds to the cost. As well as having to post returns to investors. Every hand in the pot takes a little bit more.
          It's a matter of amount hence the not needing to turn a profit statements.
    • Yeah, except...

      ... These guys, iSupply and all, they really can't do these calculations properly. They know what normal published volume prices are, the same thing I can look up on Avnet or any of those places. But they really don't have a clue what Apple's paying for a thing when they place an order for 50 million. No one does, other than Apple. Keep in mind Apple's supply strategy here -- it's not simply only making "one of everything" each year, it's the fact that most of the expensive parts, other than the screen, is the same between iPhone, iPod Touch, and iPad at the same technology node.

      Here's another way you know these tablets are cheap: compare them to Netbooks. You can buy a whole slew of Netbooks for about $300-$350. That's including an Intel chip, memory, keyboard, screen, Windows license, etc.

      So take that as a starting point. Keep the screen... most tablets have very similar if not identical screens -- yeah, Apple's paying more, but given that they're the only ones getting that Samsung screen at the moment, we don't even know the actual price difference. Toss out half the case material, the keyboard, most if not all of the ports (and associated port electronics). Again, the iPad 3 has a large battery, but the typical tablet battery is about half the capacity of a netbook battery. The SOC (ARM, maybe a nVidia Tegra or TI OMAP) cost roughly half the price Intel gets for an Atom. The tablet has half the RAM, less still storage.

      So really, where is all that supposed extra cost? There is a $20-$25 capacitive touchscreen... though some netbooks have done those, too. That's about it. So where's all that extra money going? Well, ok, on a Windows RT tablet, it's probably, well, Windows RT...