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While more of a steady smolder than a spectacular blaze when compared to the iPad, the Kindle Fire has shown that consumers are not averse to buying a non-iPad tablet as long as the price is right and the specs not too shabby. Amazon has literally lit up the tablet market, with a number of vendors now taking its lead in releasing affordable Android tablets. All the combustion metaphors aside, this surge in the ranks of decent budget tablets is only going to make the task that much harder for Wintel tablets, especially given Microsoft and Intel’s reluctance to subsidize their products. Everyone wants to know just how the duo would respond. Will the two giants try and enter into a price war with their rivals?
The answer, according to Digitimes’ sources at notebook vendors, is a loud no. While not quite as much as China’s ridiculously overpriced RedPad, these anonymous sources expect tablets based on Intel processors and Windows 8 to cost anywhere between US$599-899. But they believe that the decision to offer discounted prices to tablet vendors won’t be an easy one, should the Wintel duo want to. This is due to the fact that cheap Wintel tablets could “seriously damage pricing in the PC market and bring down their gross margin performance.”
The paper’s sources find Intel’s situation to be a bit more unenviable than Microsoft’s, as a failure to offer affordable pricing on chips to Windows 8 tablet vendors could result in them opting for cheaper alternatives like AMD’s x86 APUs and ARM-based SoCs.