Windows 8 tablet PC makers: We can’t compete with the iPad’s price

If reports from Taiwan are to be believed, hardware manufacturers are struggling to create Windows 8 on ARM (Windows RT) devices that are competitively priced against Apple’s iPad and Amazon’s Kindle Fire. The reason? According to Digitimes, OEMs have to pay Microsoft $90-100 for a Windows 8 license.

While that $90-100 figure sounds a little bit on the high side (Microsoft historically charges OEMs around $50 for desktop licenses and $30 for Windows Phone 7 licenses), it doesn’t really matter: Even at $10 or $20, Microsoft (and OEMs) would be hard pushed to compete with Amazon and Apple on price. Apple effectively gives iOS away (it’s a hardware company, after all), and Amazon gets Android for free. Microsoft has to charge for Windows 8 and Windows RT because it’s a software company; if it didn’t, it wouldn’t make any money, which shareholders might see as a bit of a problem.

The other important thing to bear in mind is that it’s virtually impossible for OEMs to create a tablet that’s comparable to the iPad, for the same price. Apple’s design, supply chain, and manufacturing dominance is so stellar that the iPad is actually one of the cheapest tablets to produce. Famously, the fat, plastic-body, WiFi-only HP TouchPad cost more to manufacture ($318) than the 3G iPad 2($310). Once you factor in the additional cost of a Windows license, there simply is no way for similarly-outfitted Windows tablets to compete on price. (As an aside, this is the same reason that OEM ultrabooks are struggling to match the MacBook Air’s specs.)

Where does this leave Windows 8/RT tablets, then? Well, for a start, Apple applies a huge markup to its tablets: The original $310-to-produce 16GB 3G iPad 2 sold for $629 (this is why Apple is the second most valuable company in the world). Windows OEMs can always undercut that price, but once they factor in license fees the profit margins will drop precipitously. It will also be interesting to see if Intel can price its SoC Atom parts (Medfield and Clover Trail) to compete with ARM. It is due to the double whammy of Intel and Windows “taxes” that Dell, HP, and other desktop PC makers only have a profit margin of around 5% (while Microsoft and Chipzilla laugh all the way to the bank with margins of 20-30%).

As long as someone is willing to take a hit to their profit margins, then, it should be possible for Windows ARM tablets to compete with the iPad and Kindle Fire. Of course, all of this speculation doesn’t take into account the fact that Windows RT could be more desirable than iOS; users might actually be willing to pay a premium for Windows tablets. For that to happen, we’d need hundreds of thousands of Windows RT apps, though, and so far it doesn’t look like that will happen. We should also remember that Apple could quite easily block the entrance of Windows RT by dropping the price of its iPads, and still remain healthily profitable.

Read about my $200 Windows 8 tablet — which seems more like a dream every day

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Apple attacks Windows 8′s tablet-laptop convergence

Apple CEO Tim Cook has effectively ruled out any future merger of iOS and Mac OS, suggesting this week that forced convergence leads to tradeoffs that nobody likes. But wait a second, Mr. Cook — isn’t that a little contradictory?

Yes it is: OS X 10.7 Lion last year debuted iOS elements on the desktop. That’s not the end either, as the Cupertino, California company is set to release an even-more-iOS-like version of Mac OS X this summer, OS X 10.8 Mountain Lion.

Cook’s frank view of the state of the tablet industry was prompted by a question during Tuesday’s financial analysts call. Citigroup analyst Richard Gardner pointed out upcoming Windows 8-based tablets that combine a full desktop operating system with laptop features like a physical keyboard, and asked if the iPad and MacBook Air products may eventually merge.

That didn’t sit well. “Anything can be forced to converge,” Cook responded. “The problem is that the products are about tradeoffs. You begin to make tradeoffs to the point where what you have left at the end of the day doesn’t please anyone.” Sounds like a not-so-veiled jab at those Windows 8 tablets due later this year, no?

Microsoft is pushing the idea of convergence heavily, and Intel’s own reference designs also hint that the lines are set to blur. Windows 8′s Metro interface is built with touch in mind. All in all, desktop computing is headed for a more tablet-like future. Cook is apparently having none of it, though.

Taking the Microsoft vs. Apple out of it, Cook does have a valid point. There are tradeoffs when combining the touch- and mouse-based worlds. Touch interfaces are built with the idea that interaction is a imperfect science: the user interface requires bigger buttons and elements to make way for our fat fingers. This doesn’t translate well to the desktop world where our mice can point us where we want to go with a fair amount of precision.

But this doesn’t make Cook’s musings on convergence any less hypocritical. Returning to my point about Mac OS X as of late: Apple has attempted (some would say failed) to integrate aspects of iOS into the desktop realm. Launchpad takes your Applications folder and lays out your apps like they’d appear on your iPad, complete with touch gestures that operate just like iOS.

Apple even tried to rewrite the way we use our mice by switching the scrolling to operate like it would on a tablet. The worst user interface “enhancement” in modern computing history? I will let our readers make that decision, although I’ll say as a Mac user myself it was turned off within five minutes of using Lion.

Mountain Lion takes iOS integration even further: notifications and messages cross over from iOS, and Apple’s standard apps get a refresh to mirror their iOS counterparts. While Cook waxes poetic on how Microsoft is doing it all wrong, his company’s own actions tell a completely different story.

Is touch going to play a big part on the desktop in the coming years? You bet. I still think it is too early to judge who’s doing it right though, or for that matter accuse somebody of being wrong. The market really hasn’t made up its mind quite yet.

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Apple pressures manufacturing partners to cancel production of ultrabooks

A new report from the Chinese publicationCommercial Times states that Apple is putting pressure on manufacturers to cease buildingultrabooks it views as too similar to its own MacBook Air. Apple has allegedly put pressure on Pegatron, which manufactures the Asus Zenbook. Pegatron became an iPhone manufacturer this past year and is described as “eager to solicit orders for next-generation iPads from the vendor.”

Pegatron has apparently already agreed to stop building the Zenbook by March, with Asus forced to move production to either Compal Electronics or Wistron. If the report is accurate, it paints Apple as a company that’s increasingly willing to throw its weight around to stifle competition by any available means. Jobs’ hatred of Android — he literally promised to fight the OS to his dying breath and last dollar — has tainted the company’s claims that its lawsuits against handset manufacturers are simply an attempt to protect its intellectual property. With the courts apparently unwilling to move as quickly and unilaterally as Apple desires, the company has seemingly turned to manufacturing pressure to enforce its will.

It can do it. Apple is now the largest buyer of semiconductors in the world and the greatest consumer of flash memory. Chinese manufacturers are extremely eager to court Apple business. Targeting a company like Asus is a smart move. Companies like Dell, HP, and Lenovo, with their enormous manufacturing presences and budget-oriented product lines, are too big to threaten and don’t compete directly with most of Apple’s products. Asus, in contrast, tends to appeal to computer enthusiasts who might want a higher-end system. It’s also a company that’s recently introduced a highly popular tablet series, the Transformer, and in 2011 it became one of the top five PC manufacturers.

The problem with these sort of tactics is that they’re exactly the type of underhand maneuvers Microsoft and Intel once used to block competition and stifle competitors. Apple built its reputation over the past fifteen years as a premier developer of products so desirable that everyone wanted them, despite the skulduggerous actions of its rivals.

In the meantime, Asus might be wise to consider alternative designs for its products to ensure Apple doesn’t drag it into court. Apple helpfully provided Samsung with some useful hints on how it might build tablets that didn’t infringe on the iPad late last year; we’ve done our best to dig up some equivalents. Possibilities include:

Sure it debuted on The Office, but NBC has been shamefully lax when it comes to filling out the patent litigation. This innovative form factor is a natural fit for the next generation of Transformer — the Triformer. Unique three-edge form factor and tri-roscope design ensures that the screen rotates to keep vital content right side up at all times.

Why do what everyone else is doing? The Getac V100 isn’t just “ultra,” it’s the size and thickness of an actual book. It packs a 1024×768 beautiful 10-inch display, a rotatable screen, and four out of five models survived being eaten by a bear. It also comes with the “industry’s best five-year bumper-to-bumper warranty.” Zen Buddhism came from China. Tibet is in China. Tibetans need rugged, bear-worthy computers. This is a no-brainer.

Finally, we offer up the NHP200 NC, a brilliant example of what happens when a manufacturer thinks outside the box, or in this case, the case. This amazing, caseless PC includes a carrying handle (barely visible at top), weighs just 12.4lbs, and is described by its creator as “[a] computer that looks like a hybrid between a sheep and a meringue.” The polyurethane foam ensures that it actually floats.

While the likes of Samsung, Asus, and Motorola “slavishly copy” Apple’s designs, real innovators are out there building computers that float. The possibilities are endless. Why can’t everyone be like Apple?

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Apple might buy Anobit, making a considerable investment in flash

It was revealed today that Apple might purchase Anobit, a fabless semiconductor company. The deal has yet to be confirmed by either party but it would apparently be in the range of $400-5ooM, making it a serious investment for Apple and an aggressive move into the flash storage industry.

Anobit isn’t a company that most people are familiar with, even those who follow technology, but apparently their products are already used in Apple’s iPhone, iPad, and MacBook Air (a banner on Anobit’s sites seems to confirm this). The company doesn’t make flash memory — they leave the fabrication up to others — what they do is improve upon flash technology. Anobit’s MSP (Memory Signal Processing) is designed to lower the cost of flash, improve longevity, and maximize performance. How this happens is pretty technical, but it involves flash-optimizing algorithms that work within the limitations of the flash– be it SLC, MLC, or TLC — to improve performance.

Functionally, this setup works through an MSP-powered flash controller, like the MSP2025. A bit of searching about the MSP2025 only turns up coverage about its announcement back in April but nothing about what products it’s used in. It was noted that the MSP2025 was the industry’s fastest controller designed for use in tablets and mobile phones (666MB/s) and that it could work with 20nm and smaller NAND. The ability to work with sub-20nm NAND as well as to improve performance of more affordable types of flash — namely multi-level cell and triple-level cell — means better flash at lower prices and more capacity for less money.

ExtremeTech analyst Joel Hruska had this to say on the matter: “Triple-level cell flash allows for larger, cheaper SSDs, but manufacturers are concerned about longevity and write cycles. Anobit claims that their MSP (Memory Signal Processing) technology can bring TLC flash up to current consumer specs and solve these problems. If Apple is looking to acquire the company, its probably as a means of increasing available storage at better price points.”

At this point the deal is still a rumor and information about Anobit is largely limited to what they provide on their site, as well as what is secreted away in the bespectacled heads of any number of engineers. What we do know is that Apple is consolidating both its suppliers and companies that they see as able to give them a competitive advantage. Former hardware-focused purchases, like that of PA Semi and Intrisity, haven’t had entirely transparent effects on Apple, but we can be confident that these multi-million dollar purchases are yielding untold benefits, while robbing competitors of access to that technology.

Calcalist, via Techcrunch

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