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.

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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.