3 ms·

So in tablets, they're going to be in the same position as Windows Phone 7 - a great OS with a distinct app disadvantage and little consumer awareness. This on

So in tablets, they're going to be in the same position as Windows Phone 7 - a great OS with a distinct app disadvantage and little consumer awareness. This only further raises the question of how much appetite device makers will have for a $75 (ballpark) software license, especially as these devices start to average closer to $400.

steveb 15y ago
If we estimate around 80MM PCs sold in a quarter, MS generates about $60 Windows revenue for every PC sold, but their costs are about $22 (from Q411 results Rev $4.7B, Profit $2.9B). It will be hard for them to the cut license fee unless they can significantly increase unit sales. This is probably why they didn't push WP7 on tablets. For almost all the OEMs, the average margin on a PC is single digits.
- polshaw 15y ago
  Can we get some citations on these numbers please? ..we aren't even in Q4.11 yet? Another key factor to bear in mind is that, at least today, tablets are an additional computing device, and don't replace any existing PC.
  - steveb 15y ago
    Fiscal years don't always match calendar years. Microsoft's Q4 ends on June 30th. http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/PressReleaseAndWebcast/FY11/Q4/default.aspx http://www.microsoft.com/investor/EarningsAndFinancials/Earn... I don't think you can say that tablets are bought in addition to PCs, as we've seen PC sales flatline and contract in the U.S. and Europe since the iPad was released. Nobody really knows what the long-term impact will be.
  - saturdaysaint 15y ago
    tablets are an additional computing device Why? As of iOS5, none of the tablets require a desktop or laptop. I'd venture to say that %90 of people use their home computer for communication (social networking, e-mail, skype) and leisure (games, web-browsing). Why should someone buy something heavy and expensive when a sleek, inexpensive (and dockable) tablet meets all of those needs?
  - FrancescoRizzi 15y ago
    I've seen that same ~80M figure over here as well: http://www.guardian.co.uk/technology/blog/2011/jul/21/post-pc-apple-products-show http://www.guardian.co.uk/technology/blog/2011/jul/21/post-p... (from July '11) as the first bullet in the "PC Sales" section, which quotes Gartner and IDC sources.
- saturdaysaint 15y ago
  Ah, thanks for the specifics. This only underscores the existential threat that a decent quality $300 Android tablet poses. Microsoft would need a staggering advantage to even sell Windows 8 at cost ($22) to a manufacturer at that level.
shoota 15y ago
My guess is that for ARM devices they'll use a different licensing scheme with a price tag closer to windows phone 7 of $5-10.
- nextparadigms 15y ago
  I doubt it. I think one of the main reasons they chose to use the "real" Windows for the ARM tablet version instead of WP7, was because they wanted to charge several times the price for it. So expect them to charge at least $30-$40 for the ARM version, even though it basically works the same as the WP7 version would've worked on tablets, with the necessary modifications. In fact, it would've probably had much better performance, since it's much lighter.
  - shoota 15y ago
    I think it puts them at a competitive disadvantage to charge so much for a more limited version of windows. I think they chose to use Windows 8 to create confusion that legacy windows applications will work on tablets.
  - polshaw 15y ago
    Personally, i think microsoft were just scared of losing the tablet platform to apple and google. Desktops, or x86, very possibly aren't going to be common in the forseeable future. Windows is their clear competitive advantage to leverage. Many full desktop apps will be compilable to run on ARM, and lets not forget MS's own software; full office and internet explorer put windows8 ahead of the competition re: serious work already. (Besides windows phone has already bombed on phones, no reason to suspect it to fair any better on tablets). Going forward it will be much easier to develop for both platforms. This is a very similar approach to the XBOX; there is an easy way to make software for both platforms.
polshaw 15y ago
I'd be really really suprised if the large scale PC producers were sending MS anywhere near $75 for each PC with windows on it. I'd say the profit on a PC not accounting for the licence fee would very likely often be less than $75. I would think there would have been a much greater push for linux or no-OS installed sales if it were anything in that ballpark.
protomyth 15y ago
I see this playing out much like the Apple OS 9 -> Cocoa / Carbon migration. Smaller, more nimble developers will convert to or create new apps on the Metro stack, while established developers will stick with x86 only apps with a smattering of "new platform experiments" (see Adobe's behavior on OS X / iPad).

steveb 15y ago

If we estimate around 80MM PCs sold in a quarter, MS generates about $60 Windows revenue for every PC sold, but their costs are about $22 (from Q411 results Rev $4.7B, Profit $2.9B). It will be hard for them to the cut license fee unless they can significantly increase unit sales. This is probably why they didn't push WP7 on tablets. For almost all the OEMs, the average margin on a PC is single digits.

polshaw 15y ago
Can we get some citations on these numbers please? ..we aren't even in Q4.11 yet? Another key factor to bear in mind is that, at least today, tablets are an additional computing device, and don't replace any existing PC.
- steveb 15y ago
  Fiscal years don't always match calendar years. Microsoft's Q4 ends on June 30th. http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/PressReleaseAndWebcast/FY11/Q4/default.aspx http://www.microsoft.com/investor/EarningsAndFinancials/Earn... I don't think you can say that tablets are bought in addition to PCs, as we've seen PC sales flatline and contract in the U.S. and Europe since the iPad was released. Nobody really knows what the long-term impact will be.
- saturdaysaint 15y ago
  tablets are an additional computing device Why? As of iOS5, none of the tablets require a desktop or laptop. I'd venture to say that %90 of people use their home computer for communication (social networking, e-mail, skype) and leisure (games, web-browsing). Why should someone buy something heavy and expensive when a sleek, inexpensive (and dockable) tablet meets all of those needs?
- FrancescoRizzi 15y ago
  I've seen that same ~80M figure over here as well: http://www.guardian.co.uk/technology/blog/2011/jul/21/post-pc-apple-products-show http://www.guardian.co.uk/technology/blog/2011/jul/21/post-p... (from July '11) as the first bullet in the "PC Sales" section, which quotes Gartner and IDC sources.
saturdaysaint 15y ago
Ah, thanks for the specifics. This only underscores the existential threat that a decent quality $300 Android tablet poses. Microsoft would need a staggering advantage to even sell Windows 8 at cost ($22) to a manufacturer at that level.

shoota 15y ago

My guess is that for ARM devices they'll use a different licensing scheme with a price tag closer to windows phone 7 of $5-10.

nextparadigms 15y ago
I doubt it. I think one of the main reasons they chose to use the "real" Windows for the ARM tablet version instead of WP7, was because they wanted to charge several times the price for it. So expect them to charge at least $30-$40 for the ARM version, even though it basically works the same as the WP7 version would've worked on tablets, with the necessary modifications. In fact, it would've probably had much better performance, since it's much lighter.
- shoota 15y ago
  I think it puts them at a competitive disadvantage to charge so much for a more limited version of windows. I think they chose to use Windows 8 to create confusion that legacy windows applications will work on tablets.
- polshaw 15y ago
  Personally, i think microsoft were just scared of losing the tablet platform to apple and google. Desktops, or x86, very possibly aren't going to be common in the forseeable future. Windows is their clear competitive advantage to leverage. Many full desktop apps will be compilable to run on ARM, and lets not forget MS's own software; full office and internet explorer put windows8 ahead of the competition re: serious work already. (Besides windows phone has already bombed on phones, no reason to suspect it to fair any better on tablets). Going forward it will be much easier to develop for both platforms. This is a very similar approach to the XBOX; there is an easy way to make software for both platforms.

polshaw 15y ago

I'd be really really suprised if the large scale PC producers were sending MS anywhere near $75 for each PC with windows on it. I'd say the profit on a PC not accounting for the licence fee would very likely often be less than $75. I would think there would have been a much greater push for linux or no-OS installed sales if it were anything in that ballpark.

protomyth 15y ago

I see this playing out much like the Apple OS 9 -> Cocoa / Carbon migration. Smaller, more nimble developers will convert to or create new apps on the Metro stack, while established developers will stick with x86 only apps with a smattering of "new platform experiments" (see Adobe's behavior on OS X / iPad).