Microsoft Really Punched HP And Dell In The Gut

Steve Ballmer punching

Photo: AP

With Microsoft’s new Surface tablets, the company is really jerking around PC makers like Dell and HP.That’s bold and dangerous.

Microsoft is reportedly charging its partners quite a bit of money per device for its Windows 8 tablet operating systems. So, it’s given itself a built-in cost advantage over its partners.

We’ve heard that Microsoft is charging Windows 8 PC makers $80-$85 per copy for the operating system. At that price, device makers will be forced to charge $500 to $700, even for ARM-based Windows RT tablets.

RT is not exactly like regular Windows 8—it won’t run Windows 7 software, only Microsoft’s new Metro apps.

So Microsoft’s partners won’t have lot of room for hot new hardware while spending what it takes to enter a new market and still compete on price with the Surface, let alone the iPad.

This is particularly awful for HP. It gutted Palm, dumped its WebOS hardware business, and banked heavily on Windows 8 devices. Now its biggest competition could be Microsoft.

It’s rough on Dell, too, which still relies on PC sales even though its trying to remake itself into an enterprise hardware and services company.

All of this so Microsoft could copy Apple’s business model of selling an integrated package of hardware and software.

UPDATE: We heard back from Dell PR after sening a list of questions asking for a statement about Microsoft Surface and Windows 8 in general. Here’s what Dell told us:

“Microsoft is an important partner to Dell and we look forward to delivering a full slate of Windows 8 tablets – and other products – later this year.”

Don’t Miss: A Closer Look At Microsoft’s Game-Changing Windows 8 Tablet

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.