Windows 8 Tablets For $399? It's Possible

The media botched it last month by reporting unrealistically high prices for Windows 8 tablets and writing their premature obituaries. Several tech sites reported that starting prices for Windows 8 tablets running on Intel Atom Z2760 Clover Trail would come in at $799 for Asus and a "confirmed" $712 from Acer. They also reported that Win8 tablets running on Intel Core i3 Ivy Bridge processors would cost $1,299.

These prices were so crazy I thought I was living in some parallel universe where the iPad didn't exist. I tried to rein in on the madness by reporting that Intel confirmed that its Atom System on Chip (SoC) was cost competitive with ARM SoC and that Intel expected Atom tablets to be price competitive.

Last week I spoke with reps at Lenovo, Acer, and Asus about the pricing rumors at the Intel Clover Trail event. Although they wouldn't disclose specific pricing, all three said they are aware of the market realities and that they would be able to hit a wide range of prices.

The reported $799 for the Lenovo ThinkPad Tablet 2 included a keyboard dock and Office 2013, which is at least a $200 markup. When I asked about the $799 figure, Lenovo said it will offer a range of pricing with different storage configurations of 32 GB and 64 GB and 1 GB or 2 GB of RAM. Asus said it will stay with 2 GB of RAM--but will offer different storage options.

As for Acer, this week we found out that Acer's W700 Windows 8 11.6 tablet running on Ivy Bridge processors with a Full HD 1920 x 1080-pixel screen will start at $799, which completely debunks last month's $1,299 rumors.

Although Atom tablet pricing wasn't disclosed, Intel Ivy Bridge processors branded Core i3 and i5 cost around $230, which is roughly $200 more than Intel Clover Trail SoC parts. The Acer W700 also starts with 64 GB of SSD storage, 4 GB of RAM, and a 11" 1920 x 1080-pixel screen, while Acer's W510 Clover Trail tablet starts with 32 GB SSD, 2 GB RAM, and a 10.1" 1366 x 768 screen. The Acer W700 has at least $300 more in component costs so it's not difficult to imagine a $499 or lower price for the Acer W510.

But I suspect that competitive pressures will force all the PC makers to prices even lower than $499. Consumers will look at the market-leading $499 third-generation iPad with its Retina 2048 x 1536 display and wonder why they're paying $499 for a Windows 8 tablet with relatively low resolution.

People also will look at the $299 8.9-inch Kindle Fire HD with 1920 x 1200 resolution and wonder why they should pay $499 for a Windows 8 tablet and another $150 to $200 for a keyboard and extra battery dock. The PC industry will hope that people pay a premium for a full Windows computing experience but a $200 premium for a device with much lower resolution might be a tough sell to consumers.

Sure, there will be business customers willing to pay these prices, especially if they include Windows 8 Professional, but the PC industry badly needs a winner with the mass appeal of an iPad or Android device. Even Apple is caving to pricing pressures with an iPad Mini as Android tablets have grown to a 48% tablet market share.

Bottom line: If the PC industry is serious about capturing market share and staying relevant, it will need to start Windows tablets at $399.