This is all well and good, but the computer trade press is reporing that the forthcoming Windows tablets will not be able to compete price wise with either the Amazon Kindle Fire (since Amazon is giving away the razor, aka tablet hardware, to sell blades, or Amazon content) or Apple’s iPad (with its massive economics of scale, scads of apps, and vaunted hardware and software elegance).

Reportedly, Microsoft is charging as much as $90-100 per Windows license, although other reports are that it is more likely between $30 and $50 a pop.  Even if Microsoft were to charge only $10-$20, Apple gives iOS away (to sell hardware), and Amazon gets Android for free.

Microsoft, being a software company, can’t give Windows licenses away for free (it would have a shareholder revolt on its hands). 

Moreover, it turns out that due to Apple’s all-around expertise, the iPad, for all its excellence,  is one of the cheapest tablets to make, and competitors’ clunky designs appear to be much more expensive. 

On the x86 side, Intel typically charges a premium for its Atom parts.

Should the Windows tablets still establish a market beachhead, Apple has enough margin to drop iPad prices.  Making Windows tablets would then be a money-bleeding activity.

No wonder then many pundits are proclaiming Windows tablets as a big dud, except for some sales to enterprises where Windows is entrnched.

If Microsoft wants to be a tablet player, it may have to make the tablets itself. 

“On the x86 side, Intel typically charges a premium for its Atom parts.”

You were mostly on a role up to that point, but sorry the ATOM has always been a low margin product for Intel.  The only premiums are for Intel’s higher end Core i-Series parts. 

Maybe you’re confusing premium with just costing more than ARM but the price gap isn’t that large anymore and Intel may reduce it next year when they go 22nm and put all ATOMs under SoC/MCM. 

While the price gap also includes the differences in architecture and what is offered.  ARM chips are not yet equivalent to Intel chips.  They’re still 32bit processors that have only started using 64bit memory management and need to improve quite a bit on memory bandwidth.

ARM is also less flexible for end users, RAM is always soldered, SSDs are slower than used in x86 systems, storage capacities are where netbooks were 5 years ago, you can’t run x86 or even most legacy apps with Android support only lasting a year or two on average.  Apple goes a little longer with iOS but even they drop support as soon as the old device can no longer run the new software properly and that happens pretty rapidly in the rapidly changing world of ARM compared to the x86 market where you can keep the same computer for over a decade if you so choose.

Never mind the difference in hardware fragmentation with ARM’s menagerie of solutions that can completely change from one generation to the next of devices from even the same company.

Add traditional PC devices support more peripherals and are more flexibly configurable and upgradeable by end users than ARM devices.

So the price difference comes with a price! 

Most ARM devices don’t support more than one USB port and even then you’re lucky to get one with full USB functionality and not require a special OTG adapter to enable host mode. 

Even linux support is all over the place for ARM because of all the closed drivers that many use.  It’s fine for Android because Google doesn’t strictly follow open source but most in the Linux community refuses to compromise on open source. 

While many ARM devices are still using GPU’s that were never meant to support a desktop OS, which goes further than just raw performance but also supporting the different standards used with desktop OS vs mobile OS.

Mind companies like Amazon are the exception even for ARM device makers.  Since most of them don’t have alternative revenue sources and have to profit on the hardware sales.  Thus why even the Google Nexus Tablet isn’t going below $249 and it won’t even be a top of the line ARM device.

Now it is true that between ARM’s ability to push for lower costs and the added costs of things like Windows 8 that x86 tablets will tend to cost more but not all x86 tablets will be running just Windows.

Remember Google supports Intel processors and have already gotten Android to run 90% as well on a ATOM as it does on ARM.  Add many will probably opt to dual boot Android and Windows 8 can easily give x86 a edge for those who want to be more productive.

Nice as Android has become it’s still a mobile OS and limited by design versus a desktop OS, and also has Linux distros to worry about which are also free for end users and more distros are available on any x86 system than there are for any ARM device.

So it does not actually look that bad for Intel if you actually factor everything and what I listed still isn’t everything, it’s not even half!

For MS, we’ll have to wait and see how well Windows 8 does. There’s never really been a successful desktop OS in the tablet space before.

While making their own tablets are a possibility, and not too different from them making their own game console…

That’s what it says on the menu… but it doesn’t mean users won’t find a way to install Linux… although all signs point to that being more difficult on systems with UEFI secure boot enabled.