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Don't Underestimate the Power of a $200 Windows 8 Tablet

By Steve Heller - Apr 2, 2013 at 11:00PM

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Besides the added portability, a smaller-sized tablet is bound to make Windows 8 tablets more price-competitive against the sea of low-cost Google Android tablets.

Thanks to a recent announcement to reduce tablet screen specifications, Microsoft (MSFT 1.12%) has effectively green-lighted Windows 8 tablets to be made in the in the 7- to 8-inch form factor. This is a major development for investors since about half of all tablets shipped today are of the 7- to 8-inch variety. Besides the added portability, a smaller-sized tablet is bound to make Windows 8 tablets more price-competitive against the sea of low-cost Google (GOOGL -0.16%) Android tablets.

What Android never was
Until now, Android hasn't seen much in the way of competition in the low-end tablet segment, allowing it to capture nearly 49% of the market last quarter. Since Android wasn't originally intended to be a tablet operating system in the first place, affordable Windows 8 tablets could easily be perceived as more productive mobile computing devices that better suit users' needs.

The icing on the cake
For all intents and purposes, Windows RT is a bridge product until Intel (INTC 1.27%) releases a processor that's better suited for mobile computing. When Chipzilla releases its quad-core Bay Trail processor later this year, not only will it be the world's first 22-nanometer tablet computing processor on the market, it will allow Microsoft and its OEM partners to offer tablets with the full version of Windows 8- in a 7 to 8-inch form factor. In other words, it's all but certain that $200-$300 full-blown Windows 8 tablets become a reality. In fact, such a device would likely score very high on the "price versus function" scale against conventional tablet operating systems, potentially mitigating the threat from mobile computing.

Searching for hidden threats
Google Search has largely benefited from increased mobile computing usage, which has inadvertently driven higher volumes of search. If Microsoft and its partners can successfully infiltrate the low-end tablet market, Bing would become poised to steal search queries away from Google Search. With the prospect of a $200 Window 8 tablet now in the mix, it's entirely possible that Google's search growth in the mobile realm may not prove to be as robust as it once was.

If consumers were presented with a $200 to $300 tablet that runs the full version of Windows 8, would they opt for it over a similar Android device? I wager Android wouldn't stand much of a chance.

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