Microsoft's Ballmer Tips Details of Surface Pricing, Sub-$200 Price Point Probably a Pipe Dream

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News Posted: Sun, Sep 16 2012 3:59 PM
Ever since Microsoft unveiled its upcoming Surface tablet but kept the pricing details under wraps, speculation about the final price tags for the devices has been rampant. However, there’s been precious little in the way of clues, save for some rumors that at least one model of the Surface will hit the sub-$200 price point.

In an interview with the Seattle Times, however, Microsoft CEO Steve Ballmer dropped some clues as to the tablets’ pricing. Here’s the bit where he responds to a question about whether the Surface will compete against the iPad on price or features:

We haven't announced pricing. I think we have a very competitive product from the features perspective...I think most people would tell you that the iPad is not a superexpensive device...(When) people offer cheaper, they do less. They look less good, they're chintzier, they're cheaper. If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle (Kindle Fire, $199) to do their homework? The answer is no; you never would. It's just not a good enough product. It doesn't mean you might not read a book on it...If you look at the bulk of the PC market, it would run between, say, probably $300 to about $700 or $800. That's the sweet spot.

If we can break this down, there are two important details to note: 1) Ballmer believes the Surface can compete with the iPad on its features; in other words, he sees them as roughly equal products. 2) He feels that less expensive tablets are simply “cheaper”, in the pejorative sense. Thus, we can infer that Microsoft’s non-cheap tablet will also not be inexpensive, and we can probably dismiss any hope of nabbing a Surface for $199.

Microsoft Surface tablet

Then, Ballmer says that “it” would run between $300 to $800, but it’s a little unclear exactly what “it” is. If we assume, however, that the “it” he’s talking about it a good tablet, Microsoft is probably planning to price the Surface tablets within that range. That would just about jibe with the iPad’s price range, although if Microsoft can hit a price point of $300-$400 for a version of the Surface, it could undercut the iPad on cost.

If Microsoft plans to unseat the iPad from the tablet throne, winning the price battle is going to be of supreme importance.
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Pejorative, nice.

Now you're just mashing it!

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They only need to price 100-200 unde the ipad, people will buy it, because it is windows and they wanted this for a few years. Pricing below the ipad just makes the decision easy.

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RiCoFrost replied on Sun, Sep 16 2012 7:08 PM

$300-$400 for the RT sounds about right.

Don't forget it comes with touch cover, office and windows 8 not just a tablet os.

Worth it :)

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RTietjens replied on Sun, Sep 16 2012 7:47 PM

Funny thing is, with my $170 7-inch tablet and my $35 bluetooth keyboard (and possibly the mouse, which was $20), I *could* do my "homework" on an Android. So my total comes in less than $225 and I am not locked into either Apple's nor Microsoft's proprietary and price-fixed ecosystem. Nor do I have to concern myself with viruses, like Windows users must (yes, there are trojans, but as a rule they affect people who try to get something for nothing).

Ballmer continues to believe he's doing a good job. Where's the price of MSFT now compared to when he became CEO?

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rapid1 replied on Sun, Sep 16 2012 11:18 PM

As far as it goes I think $300 for the lesser model would be good especially for what you get and $700 for the Pro I could also see. The thing is here does Microsoft want to make bank on these or just pay for the R&D. If they want to pay for the R&D go with those prices if you wanna make bank take a lesson from Amazon, the RT $325 Pro $525-6 max. The reason I say this is because you can buy a full on laptop and or some ultrabooks for that upper price. On top of that there making some competitors mad who will do that and probably are already planning on it. SO if M$ wants to have a lot of leftover stock go high price wise. Then after Christmas they can drop all those leftover units lower than there competitors sold all there new ones (Remember there competitor who does well this Christmas season on these will be beating there price and they would have to double down on that price.

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RiCoFrost replied on Mon, Sep 17 2012 1:07 AM

Doing work on 7" screen ouch... don't be like mac users and think you wont get viruses on an android, as more and more people use android tablets more viruses will come out. Windows is a target it because it very widely used, that's why people write viruses for them, why write a virus that targets 10% when you can write one that targets 80%....

Also your missing out that your setup doesn't come with office... So when you add the 10" screen and office cost, you'll find that the surface at $300 would be much cheaper then what you just setup there.

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JDiaz replied on Mon, Sep 17 2012 2:22 AM

Yup, it seems to be getting worse too as Q1 of this year the amount of malware for Android went up 61% but then in Q2 it tripled.

They're also getting more sophisticated and not just trying to target people who want free stuff but also try to pretend to be popular download items like games...

http://www.informationweek.com/security/attacks/more-android-malware-pulled-from-google/240003514

Some people just assume because Android is based on Linux Kernel that it somehow has similar security built in but that's far from being the case. Especially the open nature of the Google Play Store leaves them very open.

Android even gives some 'no permissions' apps access to some sensitive info, which is true of even ICS.

http://leviathansecurity.com/blog/archives/17-Zero-Permission-Android-Applications.html

 

Besides, even with Windows most attacks are from Trogans too.  While MS is providing their own security and AV that will be included in Windows RT/8.  Along with the learning curve malware makers will need to adapt to the new systems means even those who are prone to download Trojans may get at least a break for awhile.

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MCaddick replied on Mon, Sep 17 2012 6:34 AM

I'm waiting to see what the OEMs will be pricing their Window s8 RT tablets at.

I still currently prefer the surface over all but the HP (I think) one that can get 20 hours of battery life, but I'd still need to see/play with each before making a final choice.

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CDeeter replied on Mon, Sep 17 2012 8:51 AM

I think your right, we still haven't seen any of these in the wild yet. We just need to wait and see what the final product is like.

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realneil replied on Mon, Sep 17 2012 11:01 AM

My daughter bought an iPad for me about 7 months ago, so I will not be trading it in for this. The idea that a Tablet PC could ever replace my Desktop PC doesn't float for me.

I like the iPad and the free Apps for it,.....but I rely on my desktops to get things done.

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BurntChz replied on Mon, Sep 17 2012 1:11 PM

While I agree that MS will have multiple price points for different targets, they also learned a long time ago that hardware is an end-to-a-means (xbox). Sell the hardware at cost or below to get a foothold on market share, then sell the software/apps that people want, and tack on a royalty for 3rd party developers. Laptops/ultrabooks can be had in this price range, but these are distinctly different markets and I don't really see people that want a tablet changing their minds for a laptop form factor unless they experience dissatisfaction with a tablet first. I do however see more and more 'hybrid' types like the Transformer in the future and this is where MS is trying to shoot the gap.

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sevags replied on Mon, Sep 17 2012 1:26 PM

RTietjens... Why would you claim you can do your homework on an android with the extra peripherals when Ballmer clearly uses the kindle Fire as an example, he doesn't say you can't do homework on an android. Keep in mind there is a difference between a $200 Kindle tablet running a very different flavor or android (with or without ads) and a $500 Samsung or asus android tablet running more of the standard android.

The RT models needs to start at $300-400 (I myself wouldn't consider purchasing one unless it was 300 or less), and the core i5 version preferably needs to start at $800 with the top spec'ed model coming in around $1200 which if it's the case I'll be in the market for the sub thousand dollar mark version.

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RiCoFrost replied on Mon, Sep 17 2012 9:54 PM

Tablets dont replace desktops they are a tool.

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realneil replied on Tue, Sep 18 2012 10:57 AM

RiCoFrost:

Tablets dont replace desktops they are a tool.

Exactly,.............Yes

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