Continuing on from my previous post on Windows RT pricing I wanted to give a few other data points that show Microsoft is clearly aiming for the more premium end (iPad and above) of the Tablet market, and then offer another way Microsoft may choose to participate in the low-end.
First let’s talk about screen resolution. The design center for Windows 8/RT tablets is 10.1″ 1366×768 and above widescreen displays. Yes Metro apps will run on a 1024×768 display, and perhaps there will be some new tablets introduced at this resolution, but the primary purpose for 1024×768 is so Metro apps run on the majority of existing Windows 7 PCs! So what is the resolution for a Kindle Fire? 1024×600, below the minimum for Windows 8. How about other sub-$200 Tablets? Some match the Kindle Fire, but others are as low as 800×480! Microsoft is simply not targeting this market with Windows RT or Windows 8.
The second data point I wanted to explore is the Consumption/Creation scale that I’ve talked about previously. Tablets, at least ever since the iPad entered the scene and legitimized them, have been Content Consumption optimized devices. PCs have always been Content Creation optimized devices. On the extreme end of the Consumption scale are dedicated devices like the Sony Reader, Kindle, and Nook e-Readers. The iPad is closer to the Consumption/Creation dividing line and has been creeping towards it over time, but it is still firmly in the Consumption camp. The Kindle Fire is more towards the e-Reader end of the scale, being heavily optimized for media (of various types) consumption. So what of Windows 8 and Windows RT? For Windows 8, its ability to run on traditional PC configurations, work well with a keyboard and mouse (or other pointer device), and run traditional PC apps speaks to Microsoft’s desire to create the first successful operating system to truely span the Consumption/Creation line.
But what about Windows RT? Well, the inclusion of Office 2013 tells us that Microsoft expects Windows RT to span the Consumption/Creation line as well. No it won’t scale up to support desktop workstations the way Windows 8 on x86-64 processors will, but it will support the Content Creation needs of most consumers and many Information Workers! Let me put this in perspective a little more. Take an iPad and try to do creation on it (e.g., write a long email or document) and you find it sucks. Add a Bluetooth keyboard to the iPad and it sucks a little less. Take a Windows RT Tablet and try to do creation on it and it will suck too. But add a Bluetooth keyboard and mouse and the Windows RT tablet will let you very productively create Word documents, Excel Spreadsheets, and Powerpoint presentations. And write long emails. And blog entries (yeah!).
Now when you start thinking that every Windows 8 and Windows RT Tablet is a Content Creation device as well as a Content Consumption device you really don’t think “low-end”. The Kindle Fire owners I know are interested in reading books and streaming movies to their device, they aren’t interested in creating Excel spreadsheets. And they’d find it pretty painful on a 7″ screen even if they did. Microsoft will have a number of value propositions to convince customers why Windows 8/RT Tablets are a superior option to the iPad and Android devices. But perhaps their most compelling is that you don’t have to choose between a Content Consumption and Content Creation device. Windows RT is Consumption-optimized/Creation-capable. And that is a higher-end positioning.
For a third data point take a look at what little we know about the ARM chipsets that Windows RT will support. The examples I’ve seen suggest they are all higher-end chipsets. The focus is quad-core, high clock rates, etc. They aren’t cost-focused chipsets. Again this suggests Microsoft isn’t trying to target the low-end, they are focused on the high-end.
Ok, so is Microsoft just going to abandon the low-end of the Tablet market? I doubt it. In my previous post I suggested some ways that Microsoft could help bring down prices of Windows RT for Tablets. But there is another way. Let’s say you wanted to build a Windows 8-based Nook that was price competitive with the Kindle Fire. And you wanted it to have a customized very media-consumption oriented user experience but still be able to run Metro apps. Sounds like a Windows 8 Embedded scenario to me! I don’t know what to expect of Windows 8 Embedded pricing, but it certainly seems that it would be far lower that Windows RT (if for no other reason than it doesn’t include Office 2013).
In summary Microsoft is targeting the heart of the Tablet market where the greatest success to date (meaning the iPad) has been. It is also the segment that poses the greatest threat to the Windows PC franchise. The Consumption-optimized/Creation-capable design center offers the best opportunity to both keep existing PC users within the family and offer something that really differentiates Windows 8/RT Tablets from the competition. Microsoft will also go after lower end Tablets, but that is a secondary priority right now.
Hal's (Im)Perfect Vision 
When it comes to resolution APPLE is retinaizing everything… If I were MS i wouldn’t try to silo low/med/high devices based on resolution …
Pixels matter and people may not see it yet BUT when apple are finished bringing retina to all form factors across all screen sizes having anything less than what apple does will spell doom for that device!
But now you are arguing that there will not be a low end market. You’re even saying that Apple isn’t selling any iPad 2s at $399 because they are obsolete. And it will be years before a Retina Display level resolution could be done at the $200 price point. Most importantly I think you are overstating the general public’s willingness to pay for more pixels. Some will care, some won’t.
The truth is that Microsoft’s OEM model means it really doesn’t matter what resolution wins, that is the OEM’s problem. Windows 8/RT will support a Retina Display competitive 2560 x 1440 resolution. OEMs will build devices across the spectrum and see what sells, then focus the rest of their efforts there. Might guess is that major OEMs like Samsung will quickly if not immediately focus on 2560 x 1440 while a number of smaller players will seek to compete on price and go with lower resolution options. And then we’ll see what sells.
Windows Phone gives another example of Microsoft focusing on the high end first, then optimizing for the low end a year or two later.
And it makes sense when you want to build up hype and a positive brand. It also helps focusing the engineering team on a smaller set of scenarios (which is useful when you are working on a v1 product).