The growth in the tablet market has been mostly in the low end. This includes cheap Android tablets, all the way up to more feature rich tablets like the Kindle Fire, B&N Nook, Google Nexus, and other comparable devices. Even Apple has felt the heat, and as a result released the iPad mini.
So in order to compete in such an environment, do you go cheap?
Instead of dropping the price to $0 for the OS and matching Android (why switch if they are equal anyway?), Microsoft is choosing value. Reportedly, for smaller sized tablets, Microsoft has offered reduced license prices on OEM Windows 8 RT (runtime) and Office 2013. This means Windows 8 RT will not be cheaper than Android and will probably not be sold for the same price. However, if you are getting the greater productivity and the ability to play games is that worth the price difference? Some estimates indicate that these tablets will be anywhere from $50 -$100 more.
This will not kill Android, but there are a number of factors in Windows favor. The huge user base. Potential adoption by skeptical enterprises. Back to school shopping for college (fun + productive = best of both worlds?).
