Subscribe via RSS Feed

Microsoft’s Surface Expected to be Cheap to Compete

By | June 19, 2012 | 1 comment
Share |

Before Microsoft announced its brand new Surface tablet yesterday, the company gave its PC partners advanced notification that it would be entering the hardware tablet arena.

In an interview with All Things D, Microsoft CEO Steve Ballmer revealed that Microsoft let its partners know ahead of time so there would be no nasty surprises. “Our PC partners knew in advance we were announcing something today in this space,” he said.

Microsoft’s Surface tablet will run Windows 8, and by all accounts, it is situated to be a serious iPad competitor, a status that other PC vendors have been unable to attain. When Ballmer was asked how Microsoft’s partners felt about the tablet, he only replied, “no comment.”

I think we can all imagine how those partners are feeling (hopeless, would be my guess) after seeing the impressive specs of the Surface. The Surface will likely outsell tablets from partners like Dell, Acer, and Lenovo.

The RT version of the tablet is sporting an Nvidia Tegra 3 CPU while the Pro version boasts an Intel Core i5. Both tablets are 10.6 inches, weigh approximately 1.5 pounds, and are 0.36 inches thick, putting them on par with Apple’s similarly sized iPad.

It’s important that Microsoft not alienate its partners, something that Ballmer recognizes. “If you look at the bulk of the 375 million machines that get sold, they probably aren’t going to be Surfaces,” he said. The Surface, he added, is an important part of the “Windows 8 story,” but it is not “the only piece.

Of course, Microsoft was tight-lipped about pricing at yesterday’s announcement, and also conveniently left out information on the tablet’s battery life, both of which are make or break factors in the tablet world. Microsoft’s Surface will need to come with an affordable price tag, but just how low is low enough?

According to Sterne Agee analyst Shaw Wu, the Surface needs to be priced at or below the $199 that the Kindle Fire costs. A price so low would almost certainly mean Microsoft would take a loss on hardware.

Topeka Capital Markets analyst Brian White has a slightly more realistic target price in mind – at less than $399, the price of the iPad 2.

As for hints on pricing, Microsoft has said is that it will be in line with other ARM-based tablets for the lower end RT version of the tablet, while the Pro version will be priced to compete with Ultrabooks. That could mean prices ranging from $300 to over $1000.

Microsoft is expected to release more information on the tablets closer to release date, which will be sometime this fall.

email

About Juli: Contact me via Twitter: @julipuli

  • nd1090

    I think that the Hardware partners issue is overblown.

    What are these guys going to do? Defect for Android? Wait, almost all of them already did, do or something of that nature:

    1. Dell – made Android tablets.
    2. HP – made WebOS tablets and killed it.
    3. Lenovo – Makes Android tablets.
    4. Asus – Makes Android tablets.
    5. Acer – Makes Android tablets.
    6. Sony – Makes Android tablets.
    7. Samsung – Makes Android tablets.

    What options do they have? Stop making PCs? That’s a huge part of the business of Lenovo, HP and Dell – and they “abandoned” Microsoft before Microsoft abandoned them.

    They have one way forward – raise their game and create something better than the Surface – and that’s a good thing – and some of them actually have the ability to do it – they are just too comfortable not caring – what we have seen is that when these guys care and do a good job – they are rewarded – the only PC makers that was really trying in the last several years are Lenovo – whose Thinkpad line is fantastic and in many ways – as well constructed or even more so than Apple’s offering – and they are growing by leaps and bounds and Asus – which makes the best ultrabooks out there. Samsung seems to care as well – but for them PC sales are a very small part of the company.