September 17, 2012, 9:49 PM — In the suspense-filled lead-up to the release of its Surface tablets, Microsoft has declined to discuss how much the devices will actually cost--until now, at least. In a Friday interview with The Seattle Times , Microsoft CEO Steve Ballmer hinted at a pricing ballpark: $300 to "$700 or $800," quelling rumors that the Surface RT would sell at the bargain, Kindle Fire-esque price of $199. Also revealed in the interview: The Surface tablets will indeed be sold inside Microsoft's fall-season pop-up stores in malls around the country.
The Times managed to coax the pricing expectations from Ballmer by asking if Microsoft was planning to compete against the iPad on price or on features. The answer, it seems, is features: Ballmer noted that when companies make tablets to be cheaper "they do less. They look less good, they're chintzier, they're cheaper." His example was the original $199 7-inch Kindle Fire, which is anything but a productivity device.
$300 to $800 is "the sweet spot" for the PC market, according to Ballmer. While a $500 spread may seem like a huge range, it's arguably reasonable considering there are two quite different versions of the Surface. The Surface RT should be priced closer to the iPad and Android tablets, while the Surface Pro goes up against Ultrabook laptops.
With most popular 10-inch tablets priced between $449 (e.g., the Samsung Galaxy Tab 2) and $499 (e.g., the 16GB iPad), a $300 starting price for the Surface RT would still be very aggressive--even if it's not the amazingly low price of $199.
A $700 or $800 Surface Pro tablet PC would also be very competitive against current Ultrabook prices. It was only a few months ago that Lenovo broke the $800 Ultrabooks price barrier. The Surface Pro also has a lot going for it: a super-thin 0.53 inch thickness (compared to many Ultrabooks measuring about 0.8 inches thick) and about half the weight of competing 4-pound Ultrabooks. You'll have to make due with the tablet's small 10.6-inch HD display for that ultraportability, but you'll get the full computing power of a laptop with detachable keyboard cover.