Will the Microsoft Surface really cost $199?

Since the past one week, we’ve been hearing rumors that the ARM version of Microsoft Surface tablet will cost $199 only. Is there any way these rumors could conceivably be true? Particularly when given the fact the Surface hardware is custom-made-to-order and each part is expensive (from the WiFi module to the SoC) and it’s likely to be obtainable in small amounts out of the gate? Here’s what we know till now:

When Microsoft unveiled the Surface and Surface Pro tablet/PC, it offered very little information about the pricing of the devices: “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 coin, most of us have assumed that the “comparable ARM tablet” meant the iPad 2, which starts at $399. But you could be wrong.

  • What if Microsoft meant an atypical ARM tablet, like the Kindle Fire or the recently released Nexus 7?
  • What if Microsoft meant the MSRP would incorporate voluntary extras, such as one or both of the keyboards (type and touch) that are custom-made for the Surface? In other words, perhaps the “base” Surface RT model costs $199 and a keyboard augments the price by another $80 or $100 subsequently. We are also unsure about the price of the previews of the four Office apps “included with” the Surface RT devices, whether it will be free or will it come with a price tag too.
  • What if Microsoft is preparing to charge more for the services that Surface RT users may require, such as Xbox Music, Xbox Live, and Video, additional SkyDrive cloud storage and perhaps even Skype? This could be a instance where the base model costs $199 and these supplementary services elevate the final price by a hundred dollars or maybe more, further making it “comparable” to an iPad.
  • What if the base price of a Surface RT unit is $199 if you accede to a 2-year subscription bond for these services, akin to the way Microsoft is pricing its $99 Xbox 360/Kinect bundle with a 2-year Xbox Live subscription contained within?

Lots of what ifs… few real details.

Well, the hardware looks expensive and unless Microsoft is going to immensely subsidize the tablet, it’s just not going to transpire (the $199 price tag). Microsoft could take the bold step and conclude to subsidize the Surface with the notion of getting them into the hands of as many people as possible, but even this could be a gigantic venture. Not only may the move upset Microsoft’s hardware partners more, but any chances the company might have of getting back the subsidy depends on if it can motivate people to make adequate use of the Windows Store. If people don’t utilize the Windows Store, Microsoft will miss the boat. However, taking into consideration that the Windows Store will be the only way by which people will be able to download software for Windows RT devices, it is improbable that people will be able to avoid it entirely. Microsoft is a newbie to the PC hardware market, and intrinsically, it doesn’t have the manufacturing infrastructure and supply chain to release tens or even hundreds of millions, of Windows RT tablets every year.

$199 is a peculiar price for a sturdy, stylish, 10-inch tablet. It’s not entirely inattainable, and there are ways in which the economics could be made to work. We don’t know, we can just speculate. But, we’ll see it for real, whether the Surface RT will be pegged at $199 or not, on October 26th 2012.

Leave a Reply

Your email address will not be published. Required fields are marked *

1 comment