Is there any way claims of a $199 Microsoft Surface RT makes sense?

Discussion in 'Android Tablet News Depot' started by Spider, Aug 15, 2012.

  1. Spider

    Spider Administrator Staff Member

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    Summary: There are now two reports claiming Microsoft plans to price its Windows-on-ARM tablet for $199. Would subsidies, subscriptions and/or separately priced add-ons make this low-ball price plausible?

    [​IMG] By Mary Jo Foley for All About Microsoft |August 14, 2012 -- 21:55 GMT (14:55 PDT)

    In the past week, we've heard two different claims that Microsoft is planning to price the ARM-based version of its Surface tablet at $199. (Claim one, claim two)

    [​IMG]

    Is there any way these rumors could possibly be true? Especially given the fact the Surface hardware is custom-made-to-order and likely to be available in small quantities out of the gate? (And, based on the limited time the press and analysts had with the devices, of seemingly super-high quality for which one would expect to pay a premium price?)

    Microsoft is not commenting on the $199 rumor. I can't get a "no comment." Just no response at all from the Windows team.

    Update: A Windows spokesperson said the company had "no comment on rumors or speculation."

    Here's what we know: When Microsoft unveiled its Surface PC/tablet devices earlier this summer, it offered very bare-bones pricing guidance: "Suggested retail pricing will be announced closer to availability and is expected to be competitive with a comparable ARM tablet or Intel Ultrabook-class PC. OEMs will have cost and feature parity on Windows 8 and Windows RT," according to Microsoft's press release.

    On the Surface RT side of the house, most of us Microsoft watchers have assumed the "comparable ARM tablet" meant the iPad 2, which starts at $399.

    What if Microsoft meant a different ARM tablet, like the Kindle Fire or the Nexus 7? The Fire is $199, as is the Nexus 7. I guess that's one way Microsoft could claim pricing comparability. However, the Softies have been playing up the business-readiness of the Surface RT, in spite of its inability to run existing Windows apps other than Office. They have been clear they don't think the Surface RT is a consumer and/or consumption-only device.

    What if Microsoft meant the suggested retail price would include optional add-ons, such as one or both of the keyboards (touch and type) that are tailor-made for the Surface? (Right now we have no idea how much these keyboards will be and how Microsoft will package them up with the Surfaces.) In other words, maybe the "base" Surface RT unit is $199 and a keyboard adds another $100 or so. We also still technically do not know whether the previews of the four Office apps "included with" the Surface RT devices will cost anything. Microsoft officials still have not said on the record that these will be free.

    What if Microsoft is planning to charge extra for the services that Surface RT users might want and need, such as Xbox Live, Xbox Music and Video, extra SkyDrive cloud storage and maybe even Skype? This could be a case where the base unit costs $199 and these additional services raise the price by a hundred dollars or more, making it more "comparable" to an iPad. Or, again, maybe the base price of a Surface RT unit is $199 if you agree to a two-year subscription contract for these services -- similar to the way Microsoft is pricing its $99 Xbox 360/Kinect bundle with a two-year Xbox Live subscription included?

    Lots of what ifs... few real details.
    Microsoft did announce earlier this week that there will be a handful of OEMs making Windows RT-based ARM devices which could be available starting this fall. Among those OEMs: Asus, Dell, Lenovo and Samsung.
    It's interesting there was no mention by Microsoft this week of Toshiba, which had announced it was planning to deliver an ARM-based Windows RT device. Bloomberg BusinessWeek says Toshiba axed its plans as a result of a parts shortage. Industry analyst Patrick Moorhead with Moor Insights & Strategy said he thinks it is more likely troublesome drivers may have been behind Toshiba's cancellation.
     
  2. J515OP

    J515OP Super Moderator Staff Member

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    I don't think it makes sense. However if I were Apple, Amazon or Google I would want to hype this price as much as possible. That will either force MS to take a significant loss on each unit at that price or make for good comparison fodder. Apple can argue that to compete with iPad other tablets need to be $200 because they don't offer the ecosystem and Amazon and Google can say that if a tablet is more than $200 they offer a better bang for the buck value.

    The worst scenario (unless this is really what they want) is for MS to let the rumors spread so that the $200 price is expected. Then if the price is any higher people will be disappointed by the price or the fact that they need to purchase add ons. This would be despite the worth of the hardware being comparable to an iPad and a $300-$400 price being much more reasonable.
     
  3. WVUTampaAlum

    WVUTampaAlum Member

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    If MS does this people will leave apple and android in unbelievable numbers. This would put MS back as a contender in the mobile space.
     
  4. Tom T

    Tom T Senior Member

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    It really doesn't make sense to me if only because other pc manufacturers are already upset about Microsoft competing with them on a hardware level. If Microsoft starts selling hardware at a loss, say they have an aftermarket revenue stream, they could do serious or even irreparable damage to their relationship with their hardware partners. For some reason I think Microsoft may have just wanted to set the hardware standards very high for the new surface devices forcing others to do the same so lackluster products out of the gate don't doom the surface like devices from the start. Just a possibility of course, and if this could be true then we will probably see VERY limited availability of the Microsoft branded offerings and othemanufacturers rushing to fill demand Microsoft hopes their tablets foster.

    Sent from my Tablet like device running Android
     
  5. leeshor

    leeshor Senior Member

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    Allow me to respectfully disagree. We're talking about RT. Initially the only apps that will be available or will run on that tablet is Office, and not even Outlook. MS will need to do some serious convincing to get app devs on-board and so far it hasn't been easy.

    Secondly, they have been there and done that before. I know, because I owned one of their Windows Tablets, UMPC and they have''t exactly broken big into the Windows phone.

    If we were talking about the Executive version of the Windows tablet that's another story, but it will be too rich for my blood.
     
  6. Spider

    Spider Administrator Staff Member

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  7. leeshor

    leeshor Senior Member

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