Microsoft's Surface tablet reported to sell for a low $199

Price is well below materials cost, and would anger other Windows RT tablet makers

By , Computerworld |  Consumerization of IT, Microsoft Surface, tablets

Microsoft's Surface for Windows RT tablet will sell for $199 when it ships on Oct. 26, according to an unnamed source in an Engadget report.

At that price, Microsoft would surely be selling below its costs, analysts said. However, Microsoft could take the loss in hopes of making up revenues on apps and media sales for the device.

Also, Microsoft would be trying to make an impact against the Nexus 7 and Kindle Fire sold at the same $199 price, since Microsoft arrived arrived late to the tablet game.

Engadget said it learned the price from an inside source at Microsoft's recent TechReady15 conference, where launch details for Surface were announced.

Microsoft said the Surface tablet would be priced in-line with Windows RT tablets from other makers such as Asus, which hasn't announced a price. However, given the components in the Surface and other Windows RT tablets, analysts have suggested it could cost more than $600.

Microsoft said Tuesday it had no comment on pricing.

A $199 price for Surface RT "seems pretty unlikely," given the cost of materials, said IDC analyst Tom Mainelli. "We're hearing the price is more likely in the $599 range," he added.

Mainelli agreed with the consensus of analysts that a $199 price would "dramatically" help Microsoft gain traction in a crowded tablet market.

However, he noted that such a low price would put Microsoft's OEM (original equipment manufacturer) partners "in a very difficult position, as there's no way [they] could hit that price point." Those partners -- Asus, Dell, Lenovo and Samsung -- were named by Microsoft on Monday as making Windows RT tablets. Toshiba and Acer had earlier announced Windows RT plans.

Those hardware makers have to pay Microsoft for the operating system and would not have the same ability to make up the loss with the sales of apps, as Microsoft would, Mainelli added.


Originally published on Computerworld |  Click here to read the original story.
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