Windows 8 ARM tablets suffering pricing problems due to Microsoft fees, report claims

According to Digitimes, original equipment manufacturers are having a hard time meeting price targets for tablets that will run Microsoft’s forthcoming Windows 8 RT operating system, which is coded for touch input.

This is no small matter. TNW has written on topic a host of times, fretting publicly that Windows 8 devices may be too expensive, and thus price themselves out of contention for mass market consumer dollars.

However, Digitimes has some encouraging figures, and some that sting. From its report [Edited and condensed by TNW]:

“[The tablets], based on estimated general BOM costs of US$300-350 for 10-inch tablet PCs and US$150-200 for 7-inch models, are struggling to meet vendors’ price targets […] because of the additional US$90-100 fee for Windows 8.”

Interestingly, if software costs were nil, a 7″ Windows 8 tablet could be price competitive with Amazon’s rock-bottom priced, and quite popular Kindle Fire device, which costs a mere $199. Still, that Microsoft fee is hefty. On regular computers, laptops and desktops alike, the cost of Windows is better obscured, as it is a smaller percentage of the total cost of the device. Here, instead, Windows appears set to be a rather hefty cut of the expense of building a device to run it.

Microsoft may have to lower the price of Windows 8 RT, something that it could do to that specific flavor of Windows 8 while keeping its other price points intact, if it wants to be competitive. As we have said repeatedly: it matters not if Windows 8 RT is the best thing since the original iPad, if the hardware that it runs on is not viable. If that is the case then the software is moot.

These OEMs are the conduit for Microsoft to reach consumers, and if those pipes clog, so too shall Windows 8 stall. Finally, it’s important to keep in mind the time frame that we are dealing with in regards to this sort of device, as NeoWin notes: “Windows RT tablets are not expected to be sold in large numbers at first when Windows 8 itself launches later in 2012; it is likely that most won’t be ready to be released until sometime in 2013.”

TNW has reached out to Microsoft for comment on this story. Update: Microsoft declined to comment on the topic.