Is Microsoft charging companies $85 for a Windows RT license?

This seems rather obvious, but it needs to be said: Different companies have different business models. Apple manufactures physical goods, so they need to move boxes to make money. Google and Facebook charge nothing for their services, but they put ads in front of you wherever they can to recuperate their costs. Microsoft, like most software companies, makes money by selling bits either digitally or burned onto a CD. When Google announced that they were going to create Android and make it available to anyone who wanted it at no cost, that was ground breaking. Before Android you had to give money to either Nokia for Symbian or Microsoft for Windows Mobile.

Now licensing fees don’t often get talked about, but they’re critically important since they dictate how a device will be priced. Hardware manufacturers squabble over every penny of the components that go into their devices, because they know that at the end of the day they’re going to have to cough up a significant amount of money to a software vendor. According to VR-Zone, who was in Taiwan for Computex, various sources they spoke to have said that Microsoft is charging $85 for a Windows RT license.

What’s Windows RT? It’s Windows 8, but instead of supporting legacy applications written for Intel’s chips, Windows RT will run on ARM and can only use apps made in the new touch focused Metro style. Make no mistake, $85 is a lot of money. Yes, Windows RT devices will have Microsoft Office built-in, or at least a subset of Microsoft Office, but still … that figure is astronomical when you consider Android tablets don’t have that kind of overhead.

The VR-Zone report goes on to say that first generation Windows RT machines are expected to cost around $549 to $799. If that’s the case, then is Microsoft’s next operating system already dead on arrival?

  • l3v5y

    So WP7 is <$10? Windows 7 OEM is less than $60, and that's without bulk licenses. I'm very sceptical that Windows RT will be that much, Microsoft like money, but they also like market share!

    • We don’t know how much Microsoft charges companies for Windows Phone.

      • Roland

        Who talked about Windows PHONE? We talk about a full-blown version of Windows here, “just” on a different processor.
        And I am sure, MS won’t charge more for RT than for normal Windows. Normal prices for large scale OEMs like Dell or HP are about 5-10 $ per license, depending on the version (Home, Pro, etc.) and volume. So I am sure that a normal tablet-OEM won’t have to pay more than that.

        • The previous commenter, “l3v5y”, asked me about Windows Phone, so I answered him.

          As for the numbers you’re throwing out, do you have any sources?

          • Roland

            OK, your’re right, he wrote WP7. The numbers I have for Windows 7 are from the german “Heise Newsticker”, one of the most respected IT-Newssites here, part of german publishing company Heise. They also have a bi-weekly IT-journal called “ct” that wrote the same numbers quite a while ago.

          • Link? I’d love to read the story you’re talking about. I have a hard time believing that $5 to $10 figure.

      • l3v5y

        Sorry, I was using WP7 as a known example (it is around $10 per device), to suggest that the $85 price tag for Windows RT is far higher than it will be. It’s an ARM based OS, with a fairly limited feature set – much closer to WP7 than to Windows 7.

        • As far as I know, no numbers were published regarding the fees for licensing Windows Phone. There were some rumors a few months back about ZTE paying an average of $25, I know since I wrote that story up, but again, those were just rumors.

  • Gregory C Newman

    I hope that this is not true but if it is Microsoft will get a very very RUDE awaking about being in business which is the Public searches for more bang for the buck devices. if low end Android and Apple 16 gigabit Ipads are cheaper than any Windows RT tablets that do not even have many APPs right now then the Windows RT tablets wont sell very well and Windows on ARMS will fail to make any dent in the Tablet market. The Intel Windows 8 Tablets will suffer also if they cost too much. The Windows 8 Intel CPU controlled Tablets Computers main advantage is if the os is right they will run Windows PC/Laptop laptop  business and games and ect that run into the thousands in number they wont be dead on arrival as far as APPS are concerned but if the OEM’s cannot make them cheap enough to compete wit Apple or Android products they will be a Good product that might get killed off because the Public goes for good cheap bang for the buck products. Intel and Microsoft and Windows 8 OEM’s had better sit down and realize the Public wont tolerate buying a product that cost’s too much. Microsoft, Intel, and the windows OEMs must be brave enough to maje less profit to get Windows 8 tablets off the gorund. another thing where is a windows 8- 7inch tablet people will buy theme if they are available and cheap enough.

  • Hammams

    Something was said that isn’t true. Thanks to Microsoft, companies pay license fees to Microsoft for using android. Microsoft is making more money from android because of patents than they are from windows phone.

    As for windows 8, or RT, it’s going to be a flop. No one with a PC will want to downgrade to it and Microsoft has had a pattern of releasing one bad OS followed by a good one for more than the last decade.

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