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Windows is betting big on the tablet market by designing its upcoming operating system around touch interfaces. But tablets running Windows RT might have a hard time competing in a market filled with $200-$300 Android devices. Google’s operating system is offered royalty-free whereas Microsoft’s alternative will cost around $85, according to a report from VR-Zone citing multiple tablet vendors.

VR-Zone says Windows RT tablets will cost between $549 and $799 at launch, with premium models going for as much as $899. Granted, there were some attractive designs being showcased at Computer, and Microsoft promise to deliver a new level of output with apps such as Office, but that’s quite a premium.

By comparison, the iPad starts at $499 and already counts some 225,000 apps designed specifically for it on the Apple App Store. It also includes a high-resolution display that’s unmatched in the tablet market. Meanwhile, Asus is rumored to be working on a 7-inch, Google-branded tablet packing a quad-core Tegra 3 processor from Nvidia that will allegedly be in the $150-$250 range.

Microsoft still has to prove that Windows 8 is a good fit for the form factor. Although the Metro interface seems well suited for tablets, Windows RT won’t run all the Windows software we are used to running on desktops, and it might take a while to construct a good assortment of Metro-specific apps.

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