Windows 8 tablets with Haswell: The $500 dilemma

Intel's new Haswell processor has the potential to bring Windows 8 tablets to the mainstream, but only if they can meet buyer's price demands.
Written by James Kendrick, Contributor
Envy tablet
Image credit: James Kendrick/ ZDNet

The new Haswell processor from Intel is the perfect blend of performance and low voltage demands. The new MacBook Air shows that it's finally possible to offer great performance while having the long battery life that buyers demand. It is the perfect hardware platform to bring Windows 8 tablets and hybrids to the mainstream consumer, something that Microsoft and OEMs are desperate to do. Sadly, the use of the Haswell processor may see new Windows 8 tablets failing to meet the primary demand of new buyers, price.

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The new MacBook Air is a fantastic laptop due largely to the Haswell processor that Apple has put inside. My MacBook Air is as fast, and at times faster, than my MacBook Pro with the Ivy Bridge processor. This is impressive as the Haswell processor in the Air is only clocked at 1.3GHz compared to 2.6GHz in the Pro. After using the MacBook Air for a few weeks, it's easy to understand why I desperately want my HP Envy x2 to be refreshed with the Haswell processor. Even if HP does that, my concern over what price the new Envy would garner is big.

I really like my HP Envy x2 hybrid, both as a tablet and a laptop. The thin tablet is as light as the iPad, even though it is a bit bigger with the 11.6-inch screen. The laptop dock (included with purchase) turns the tablet into a no-compromise laptop.

I hear $500 over and over again as the price regular consumers are willing to pay for a Windows tablet. You can say they'll have to settle for lesser hardware, but they won't. They just won't buy if that's the option.

As much as I like the x2, the fact is the only reason I bought it was due to the price. When it was first released it listed for $700-800, a price I didn't even consider paying. Once the online price dropped to just over $500, I hit the buy button immediately. This wasn't because I am cheap, I've been known to spend far too much money for gadgets. It was because the Envy x2 was not going to be my only, or even my primary, computer.

Like many prospective Windows 8 tablet buyers I have contact with, I have a limit of near $500 for a new tablet. I might exceed that limit in special circumstances, but in the case of the Envy that was as high as I was willing to go. Being entrenched in the mobile space, I was almost certain that the Envy x2 would serve me well but even so, I had no inclination to hit the Buy Now button until the price came down to the near $500 mark.

I've come to realize that this price point is not mine alone, I regularly hear from folks who have the same limit. I don't think this price point is a result of comparing such a purchase with buying an iPad, it's simply the perceived value of the purchase to the buyer. Analysts are fond of telling us that all new tablets, especially those running Windows, must be priced in line with the iPad. From my many conversations with regular consumers, I don't believe that is necessarily the case.

I now believe that $500 is about what many consumers are willing to spend on new technology like the tablet, and not much more. When I quiz prospective buyers about spending more, I am most often met with an absolute refusal. They have a mental block against paying more than that for any tablet, especially unknown models like many running Windows 8. This must be a contributing factor to the low sales of the higher priced Surface Pro we hear about every few days.

This is no scientific survey, I am the first to admit that. But I hear it often enough to believe there is something to this $500 Windows tablet price limit. In retrospect, even though I had never consciously thought about such a price limit for myself, I did indeed have one. I could have bought the HP Envy x2 when it was first released at a higher price but I didn't consider it. I also didn't waste much thought on the purchase when it came close to $500, either. In reality I was like many others with whom I discuss this.

I am on record stating that if HP refreshed the Envy x2 and did little more than upgrade to the Haswell processor, I'd be delighted. This would address the performance issues of the Intel Atom processor in the x2. Performance isn't bad but it's spotty at times. The Haswell processor would address that, no doubt.

But when I consider such a refresh, my $500 price range would still apply. Even though I know that the Haswell upgrade would be great, it doesn't move my cheese to a higher price table. The fact is, like many I discuss this with, a Windows tablet isn't worth much more than $500 to me. It's not a case of analyzing the hardware components and determing how much I'm willing to pay, it's that $500 is what such a gadget is worth to me.

I feel confident I'm not alone in this regard. Windows 8 tablets haven't been flying off the shelves no matter whose numbers you use, and I think a big reason behind that is the relatively high price stickers on them. There are tablets and hybrids priced over $1,000, in some cases over $2,000, and I'd take a bet those won't be on many buyers' wish lists.

I can hear it now, some will claim my expectation that OEMs sell Windows tablets with good components for such a low price is unreasonable. That's a fair reaction, but the fact is very few mainstream buyers look at things like specs and adjust the price they are willing to pay accordingly. They have in mind the price such a gadget would be worth for them, and I firmly believe that's about $500.

Many are not willing to put up with less-than-stellar performance, such is the case with tablets/hybrids running Atom processors. It might be unreasonable to demand lower prices and great performance, but that's what I hear over and over again from prospective buyers. Even with the prospect of the next generation of Atom processor, Bay Trail, on the horizon, I doubt it will be as good as is now possible with Haswell. Atom processors have gotten better each generation, but there is a reason they are budget processors. They are definitely a compromise over the Haswell chips, and less than optimal performance will come to haunt Windows tablet makers.

Don't get me wrong, there are tech-savvy enthusiasts who carefully research hardware components in products and adjust the price they are willing to pay accordingly. There aren't enough of them out there to get any company the sales numbers they require, as current PC sales will confirm. That's why companies are aggressively pursuing the mainstream tablet market because that's where the big sales numbers are found.

Color me unrealistic, but I want my HP Envy x2 with Haswell inside, and I want it for the same price I paid for my current model. I feel comfortable stating that many, if not most, prospective buyers of Windows 8 tablet will demand good performance and the magical price of around $500. That's the price point that will open buyers' wallets, not much more.

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