Will Intel and Microsoft Use Netbook Lessons to Compete with iPad? | PCWorld Business Center.  (No longer available online. Original text included below.)

Apple is winning the tablet battle in business, and the only way for the competition to succeed is to have better functionality, or to have similar features to the iPad but beat it on price. Today, laptop vendor sources are saying that tablets based on Windows 8 with Intel processors are likely to be priced no lower than $599, where iPads start at $499. Based on experience, both Intel and Microsoft know how to lower costs to compete, so will they do that with tablets to knock the iPad from it’s dominant position in the workplace? What else might make Windows 8 tablets appealing in the workplace?

A Lesson Learned?

The rumored pricing is very similar to current Windows tablets, which aren’t flying off the shelves. Though we don’t yet know the specific pricing of Intel’s Clover Trail-W processor that will power Windows 8 tablets, or of Microsoft’s Windows 8 operating system for tablets, this situation is very similar to the early days of netbooks. While netbooks may not have been a wild success, and are now almost dead, Intel and Microsoft found ways to reduce their pricing so netbooks based on their products could compete with ARM and Linux based alternatives. 

With Intel’s Atom processor, and Microsoft’s Windows 7 Starter Edition operating system, each company found a way to offer a differentiated product that it could justify a lower cost to capture more market share. With tablets, a similar approach is needed: a processor made specifically for tablets, and priced accordingly, and a “limited” version of Windows for tablets that can also justify a lower price point.

Intel Not Inside?

If the cost of Intel’s processor isn’t as low as it needs to be, one way Microsoft may still be able to succeed with Windows 8 tablets is by leaving Intel out, and instead run on ARM based hardware. Though Windows 8 licensing will still increase the price of tablets, using lower cost ARM processors from Nvidia, Qualcomm and Texas Instrument will help keep the cost within reach of the competition. In the same way, if Windows 8 licensing is to costly, Intel could succeed without Microsoft since Google’s Android, which should influence price less than Windows 8 would, will run on Intel processors, though its availability on the cheaper ARM processors makes this less likely.

Compelling Features

Another way Microsoft could succeed would be if the features of its tablets, and the way they interact with PCs is compelling enough to make users want to have Windows 8 on both their tablet and their PC. Right now, the main reason businesses might want, and even need Windows 8 on a tablet would be its ability to run full desktop apps. Most Windows programs are designed to run on Intel x86 processors, so while they can’t run on an ARM based tablet, they may be able to on an Intel Clover Trail-W based tablet. This could be a huge selling point for companies that want native applications running on mobile hardware, and the same applications running on both desktop and mobile.

Lower Cost Wins

Though running native x86 apps on a tablet could be a selling point for Windows 8, as long as network access is available, businesses can always use remote desktop software on any tablet to accomplish the same goal. Being more expensive than the competition would likely limit the adoption of Intel powered Windows 8 tablets. If, however, both Intel and Microsoft have learned a lesson from their Netbook experience, and the rumors aren’t true, the possibility of lower costs could allow them to compete based on price, which for businesses, would make all the difference.