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Maybe Microsoft Surface RT Will Sell For $199

Radford C. Aug 15, 2012 1

After all the talk in our podcast and the deliberate BS call out to Acer’s CEO on the impossible price point, it appears that the executive could have the last word. Multiple sites are reporting today that Microsoft employees have confirmed the Surface RT tablet will retail for $199, a price that is well below what the general consensus was when the company unveiled it last month.
Allegedly, the price point was revealed during the TechReady 15 conference, an internal event for Microsoft employees of all divisions.

The low price will only apply for the RT version of the tablet, which runs on an ARM-based chip set. Windows 8 Pro models, running on Intel chips, will launch a few months later, likely with a $100 premium, if not more.

At $199, the price is below the analyst and industry insider consensus expectations of $499.

Window’s other partners, especially Acer, have been very vocal in stating they believe Microsoft’s push into tablets will hurt vendors. If $199 is true, it appears Microsoft doesn’t care.

PC World reports:

Would it upset Microsoft’s OEM partners? Probably. Asus, Dell, and others don’t have Microsoft’s cash and probably can’t sell the device at a loss like Microsoft can. However, it may be beneficial for all parties if Microsoft can claim some tablet market share for Windows 8 out of the gate.

A larger audience would fuel developer interest. More apps, more functional apps, and better quality apps will help drive adoption by businesses and consumers. Rinse and repeat. Without an audience, developers will quickly lose interest.

At $199 the tablet would be almost too good to pass up, and would almost definitely be a huge sales success. The problem might be that once Microsoft sets the bar at $199 customers may balk at higher prices down the road, which could be an issue for both Microsoft and its partners.

It may not drive sales right out of the gate, and it seems to upset many customers, but perhaps the Apple strategy is better? The iPhone originally retailed for $599. Two months later Apple slashed the price to $399. Now, it has been available for $199 with a two-year contract for years, and Apple is selling millions of them.

If you start at $600, $200 becomes a steal. If you start at $200 and you later try to raise the price, customers just feel like they’re being ripped off.

I can say this much. At $1000 I would not buy a Microsoft Surface tablet. At $600 I’d consider it. At $200 it would be a no-brainer. I might buy two.

Via »PC World