Analysis: Microsoft Surface tablet price range, RT and Pro

Here's the price range for the Microsoft Surface tablet (RT and Pro); at least, as cooked up by an analyst making some reasonable-sounding assumptions. Microsoft (NASDAQ:MSFT) is staying schtumm, natch.

In IT Blogwatch, bloggers wonder whether, at $400-$500, Surface RT can compete with Apple's iPad.

Microsoft Surface

By Richi Jennings: Your humble blogwatcher curated these bloggy bits for your entertainment.

Gregg Keizer rules the roost:

Although Microsoft unveiled the Surface RT and...Pro tablet[s] in June, the company has yet slap price tags on either. ... Sameer Singh, an analyst with Finvista Advisors...assembled a BOM [bill of materials]...then added a 25% to 30% markup to arrive at [a] $399 to $499 price range for the Surface RT.

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Many of Singh's estimates were derived from similar components in known tablets, such as Apple's 9.7-in. iPad. ... Microsoft will begin selling the Surface RT on Oct. 26 at its online store, and [its] retail outlets.  MORE

Brooke Crothers covers the story too:

The least expensive Microsoft Surface tablet will be priced more in line with a low-end laptop than a $199 Google Nexus 7. ... And the Pro version -- due next year -- will fall in the $799 to $899 range.

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But...how much will Microsoft charge for its "revolutionary" 3mm thin cover/keyboard? If [it's] pricey, then the device-plus-keyboard enters more rarified pricing tiers.  MORE

So Sameer Singh speaks:

With a launch set for later this month, speculation has intensified, with some sources stating a price less than $399 for the RT version. ... Microsoft's pricing decision with the Surface range of tablets depends less on their gross margin and more on their OEM partnerships. ... OEMs are also at a cost disadvantage as they need to pay Microsoft a license fee of $50-$65 per Windows RT device. OEMs could cut some of the costs mentioned in the BOM...but Microsoft's hardware requirements could make steep cuts a challenge. ... I expect most Windows RT tablets to be priced at the same range [as Surface RT].

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At a minimum, the Surface Pro should add about $320 to the Surface RT's BOM...the Intel Core i5 processor...costs about $200 more than the Tegra 3. ... Luckily, OEMs have more avenues to cut costs here [with] a cheaper Atom or Core i3 processor, saving about $80-$160. ... I expect the Surface Pro to retail for $799-$899 (excluding the smart cover / keyboard).  MORE

But Preston Gralla isn't optimistic:

Microsoft is betting the farm that its Windows RT tablets will help eat into the iPad's dominant market share. But...at that price, it's not likely they'll make many inroads. ... Microsoft needs to be careful not to harm its relationship with its tablet hardware partners. ... So Microsoft will essentially match their retail prices, instead of undercutting them.

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[It's] a serious problem for Microsoft. To beat the iPad, Microsoft needs to either significantly undercut it [or] offer a dramatically better tablet.  MORE

Disinterested in Windows RT? Paul Thurrott tries to change your mind:

Windows RT, the ARM-based version of Windows 8...epresents the future. ... Windows RT is a purer implementation of Metro, because it dispenses with huge chunks of legacy desktop goo. ... By engineering Windows 8 this way, and not just making a separate Metro-only OS for tablets and devices, Microsoft is sending [a] clear message...that the future of general-purpose computing [is] devices and not PCs.

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They value portability and battery life over raw power. They must be reliable and secure. ... They must be appliance-like, and simple. ... Some people will naturally rail against this future. ... But as more and more people adapt...the impetus behind desktop software and hardware development will slow.

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Windows 8 is a huge transition specifically because Microsoft is moving Windows away from the desktop. ... This is the single biggest change that’s ever happened to Windows.  MORE
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