Microsoft's Win8 ARM Tablet Will Make Or Break Windows TabletsMicrosoft's Win8 ARM Tablet Will Make Or Break Windows Tablets

Microsoft has a big news week coming up. It has scheduled a secret event somewhere in Los Angeles for Monday, June 18, related to the tablet market. More details and even the venue are unknown as I write this Friday morning. On Wednesday, June 20, Microsoft will hold the Windows Phone Summit in San Francisco.

According to thewrap.com, Microsoft will be announcing a Microsoft-branded tablet running Windows RT, its name for Windows 8 on ARM processors.

Is Microsoft going all-in to the tablet market, putting itself up against Apple? I don't think so. I think it's more likely a Microsoft Windows RT tablet would be akin to Google's Nexus phones. Microsoft will attempt to set a high standard for its OEMs.

At least it had better. A less-than-impressive Microsoft demonstration system would be a disaster for OEMs. Microsoft and the OEMs want users to go into the store wanting to see Windows tablets.

You can bet that users will demand to see lots of apps. Maybe most of them suck, but users know they can go to Apple's or Google's store and find a zillion apps, many free. Microsoft will have to have at least a lot of them, even if it has to pay ISVs to write them, which I'm sure it's doing.

But the biggest part of the tablet equation, as information's McDougall argues, is price. Whether true or not, Microsoft enters this market with the conventional wisdom saying that the iPad is the pinnacle of the tablet art form. Microsoft's can still be really good, but it better undercut Apple on price and by a meaningful number.

Because reports indicate that the OEM cost of Windows RT could be as much as $85, Microsoft is in a particularly awkward position with respect to OEMs: It's not paying that $85 to itself and the OEMs don't have to pay it for Android. So if the Microsoft tablet comes out aggressively priced, Microsoft will be setting a low expectation for OEM margins. And yet it can't price it too high.

The other pricing problem Microsoft has is the cost difference between Windows RT tablets and the eventual Intel-based tablets. The Intel tablets will be far superior: they will be faster, manageable (Windows RT cannot join a network domain), and compatible with existing Windows apps. Imagine going into the store and being told that the Windows RT tablet doesn't run Windows programs. You pretty much have to go through the Microsoft app store.

So Microsoft has some treacherous navigation ahead. A demonstration tablet is unlikely to secure a good future for Windows 8 tablets, but it could doom that market.