Analyst says Surface too expensive, gets some facts wrong

Despite Microsoft's Surface tablet being priced $100 cheaper than an equivalent Apple iPad, one analyst says the upcoming Microsoft tablet is too expensive.

Shaw Wu of Sterne Agee spoke with the Wall Street Journal's Digits program and compared the Surface RT tablet to Microsoft's failed Zune line of portable music players and the company's Kin feature phone blunder.

"We think this new Surface tablet that they're doing is actually quite interesting," Wu began. "[Such as] the innovative cover keyboard – the cover doubles as a keyboard – but we think what could end up hurting it is the high price point. They're talking about starting it as $499, and then $599 with the innovative touch keyboard, but the problem is you've got Google and Amazon pricing their tablets at only $199, less than half [of Surface's starting cost]."

Though Wu disagreed with the pricing, he made no mention of the fact that the least-expensive Surface is actually less expensive than the current iPad model with the same amount of storage.

Wu added that the Zune failed because it was priced on par with Apple's iPod line. In reality, however, the Zune music players were typically $50 less than the equivalent iPod, a gap that was later expanded even further with price cuts.

When asked about today's iPad event, Wu said the announcement could have a major impact on Surface's success.

"Right now, the vendors out there, including Microsoft, have a tough enough time competing against a $399 iPad 2. With the potential iPad Mini being priced at $299 or $349, which is obviously the lowest price point they've ever done, it's going to make it even though for Surface to do well," he said.

Source: The Wall Street Journal

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*FACEPALM* they used a pic of the old Surface (now called Pixel Sense)...I mean, really? did they just search google for "Surface" and copy & paste like everything?

on topic - I think Microsoft was pretty clear about why they choose the price point - if you price it at $199, you simply have to make some compromises. With a $500 tablet, you have room to make a really good product without worrying about making it as cheap as possible.

The average consumer will look at price first then at what their friends have. Considering all tablets are called iPads to the average consumer you know what tablet they will go for, especially now there is an iPad mimi. Maybe MS needs a Surface Mini?

I am too lazy but what I would really like to do is put together a list of the people who say Microsoft's Surface, tablet, or OS will fail. Then later on if they are doing alright or good I would like to bring it to their attention and see what they have to say.

analyst these days = apple shareholder

I see apple cheerleaders and shareholders are in full damage control.

the only thing apple has is the high app number, but soon that wont mean a thing when stuff like the full pc unreal engine 3 runs on winRT,and other non mobile engines and software is moved to RT.

and people don't know but theres a ton of software that will show up at launch in the store. Microsoft gave a preliminary list of xbox titles that will be there at launch,and there were more coming.

mrdeezus said,
Only two words to say to another uninformed douchebag:

SOLD OUT!

Dropping the mix now


Depends how many they made doesn't it. It isn't that impressive if they only made a few hundred thousand is it?

mattacular said,

Depends how many they made doesn't it. It isn't that impressive if they only made a few hundred thousand is it?

Except they made between 3 and 5 million.

mattacular said,

Depends how many they made doesn't it. It isn't that impressive if they only made a few hundred thousand is it?
It doesn't really matter! They made as much as they thought would be appropriate - those devices sold out and there is still demand! Seems like there are more people wanting one than expected. From that perspective, my analytic brain tells me that the Surface is a success.

Until I see a few reviews that show what the performance on these RT tablets is I am going to assume they are crap. Has anyone run Windows 7 on an atom with a small amount of RAM? It sucks balls! I see all these people blabbing about how great Windows 8 tablets will be because they are a full desktop OS and not mobile. Well guess what, it is a desktop OS running on sub-par mobile hardware! If someone gives me evidence that it can run the apps like a champ then I will change my opinion but until they do I'm extremely skeptical about it.

Ashpian said,
Until I see a few reviews that show what the performance on these RT tablets is I am going to assume they are crap. Has anyone run Windows 7 on an atom with a small amount of RAM? It sucks balls! I see all these people blabbing about how great Windows 8 tablets will be because they are a full desktop OS and not mobile. Well guess what, it is a desktop OS running on sub-par mobile hardware! If someone gives me evidence that it can run the apps like a champ then I will change my opinion but until they do I'm extremely skeptical about it.

Oh look, someone else as ill informed as the supposed analyst, you do know that Windows RT is only similar to Windows 8 as far as the interface goes. The kernel, while still an NT kernel, has been rewritten to run on ARM.

Windows RT is designed to ONLY run on ARM processors which means that it's well optimised for the hardware it's running on.

Edited by neo158, Oct 23 2012, 3:41pm :

Ashpian said,
Until I see a few reviews that show what the performance on these RT tablets is I am going to assume they are crap. Has anyone run Windows 7 on an atom with a small amount of RAM? It sucks balls! I see all these people blabbing about how great Windows 8 tablets will be because they are a full desktop OS and not mobile. Well guess what, it is a desktop OS running on sub-par mobile hardware! If someone gives me evidence that it can run the apps like a champ then I will change my opinion but until they do I'm extremely skeptical about it.

Windows on ARM is not your old windows.
The new Windows 8 Kernel is not your Windows 7 Kernel.
Part of the reason Windows 7 on Atom sucks is because that generation Atom was limited.
When users can install things without calculating impact of the OS, like applications that run as services that wake on timers to do work, then yes the overall performance sucks.
This is why WindowsRT devices do not allow for desktop support. Not because it can't, but to ensure performance and battery life.
The reason we do not have Surface Pro today is that the chips aren't ready. The next generation of Atom processors will have on-die gpu capable of 1080p x.264 decoding, reducing the strain on the CPU.
You can be as skeptical as you want. This device was 3 years in the making, with R&D spanning the last 30 years.
I think MS have it, but the price is hard to swallow if you cannot sell the added value to consumers. The problem is Analysts like this who are respected in business circles who will engage the whole consumer industry into a collective group-think that will undermine the true strengths of this device.

Microsoft NEED to get the media on their side to tout the value. The squeaky wheel always gets the grease. Historically, Microsoft seemed to forget this when launching new products. Now that they're in the hardware space big time, and committing over a billion dollars, we can only hope the situation will improve.

If we are going to compare the product based on hardware alone, then at least be honest with the technology differences.

1) Construction - Lets see someone make an iPad into a Skate board. Two seconds it flexes and cracks.
2) Touch Digitizer resolution
3) USB interface

blah blah

The real difference is the industry standard Windows technology under the hood that is NOT A MOBILE OS.

Sure you can't run x86 on the Windows RT, but it can run full DirectX game engines and other technology that Android AND iOS cannot even come close to handling.

As ARM drivers become available, it can support ANY peripheral via USB/Bluetooth. The OS being Windows, not a mobile OS, has full printing subsystem, including higher resolution production quality XPS output than even OS X can produce.

Even the Audio technology is a generation ahead of OS X, let alone the stripped down Audio stack in iOS and the horrid audio technology in Android. Windows (again this is Windows) has the lowest distortion level with multiplexing sound and re-sampling. (It also supports higher fidelity sound than Android or iOS.)


Will end users care? Yes, because the potential for software and hardware device support will make the niche hardware accessory market for the iPad look like a joke. At launch it will support more devices and peripherals than the iPad.

Oh, and lets talk productivity, Office is meaningless? Do people really use the built in wordprocessing and numbers crap on the iPad. Both of which are more limited than the Web versions of Word and Excel, and so slow, they are the punchline in jokes. Try using a large spreadsheet in numbers and buy another iPad to watch a movie while it opens. There is NOTHING on iOS or Android that even comes close to the versions of Word, Excel, etc that is shipping on Windows RT, and even what is available on Android and iOS is far slower even being far more limited.

How about font support? Install any good fonts on iOS lately? Oh wait, it is a limited mobile OS, and you only get what Apple supplies. Windows RT again is Windows, install and use whatever font you want.


Windows RT and Microsoft Surface Windows RT are the PREMIUM products, not the iPad.

To all the people saying this analyst has failed/flopped/whatever, try actually listening to what he is saying. He says MS have priced competitively with the iPad, making it a premium product (apple tax anyone). However, MS do not have the brand value of Apple, hence him talking about the failure of the zune vs the iPod. He feels that to be competitive in an Apple dominated world you have to price significantly below the iPad like the cheap google tabs, which MS havent done.
I think he is right and wouldnt be surprised if we see a price cut on the surface not long after launch. The iPad mini and other low priced tablets will murder windows 8 RT.

the better twin said,
To all the people saying this analyst has failed/flopped/whatever, try actually listening to what he is saying. He says MS have priced competitively with the iPad, making it a premium product
It _is_ a premium product and the 'Google and Amazon tablets' do not even come close. The guy is an idiot saying a Porsche, while competitive against the Audio TT is overpriced because Fiat is selling much cheaper cars.

The guy is saying that while priced competitive to an iPad it's not in the same class. TO me this guy looks, sounds and probably is affiliated or has a stake in Apple. Also being from Apple village might help..

paulheu said,
It _is_ a premium product and the 'Google and Amazon tablets' do not even come close. The guy is an idiot saying a Porsche, while competitive against the Audio TT is overpriced because Fiat is selling much cheaper cars.
The guy is saying that while priced competitive to an iPad it's not in the same class. TO me this guy looks, sounds and probably is affiliated or has a stake in Apple. Also being from Apple village might help..

It doesn't matter whether it is classed as a premium product or not consumers won't care. The Zune HD was a premium product and look what happened to that. Like it or not the rules have changed for MS, Apple have cornerned the premium high end tablet sector and Android tablets have cornered the low end. MS now finds itself in the middle and without the massive brand power that Apple holds. To make this compete it has to be compelling on a price level and making it comparable to the ipad just isn't going to cut it especially since there is going to be a cheaper 7 inch option on the market.

I agree with the guy. I think the highest Microsoft should have charged for this is $399. Lower res screen, no GPS etc. Plus Apple is launching their iPad mini today priced at a rumoured $249 (8Gb) and going up from there. I think Microsoft goofed on the pricepoint for this.
I was going to get one but not anymore at that price.

Hackersoft MS MVP said,
I agree with the guy. I think the highest Microsoft should have charged for this is $399. Lower res screen, no GPS etc. Plus Apple is launching their iPad mini today priced at a rumoured $249 (8Gb) and going up from there. I think Microsoft goofed on the pricepoint for this.
I was going to get one but not anymore at that price.

Again, yes, there is no GPS and a lower screen res, but for the same capacity iPad, you have to pay $100 more than this. Also, the Surface has a Micro SDXC port, whereas the iPad does not and the Surface has the built in kickstand, which the iPad does not. Yes the Surface, GB for GB, should be cheaper than the iPad, and it is. Would it be nice if it were cheaper? Sure! Everyone likes spending less on stuff! But the price is what it is, and it is well within the realm of "fair".

Finally, you cannot compare a 7 inch tablet with a 10 inch tablet, they are quite a bit different in size and cost to manufacture

/You could also wait for sales if the price is that far out for you

Edited by Sraf, Oct 23 2012, 2:29pm :

Hackersoft MS MVP said,
I agree with the guy. I think the highest Microsoft should have charged for this is $399. Lower res screen, no GPS etc. Plus Apple is launching their iPad mini today priced at a rumoured $249 (8Gb) and going up from there. I think Microsoft goofed on the pricepoint for this.
I was going to get one but not anymore at that price.

Same. I love the Surface, the design behind it is fantastic and the guys did a fantastic job with that aspect, but pricing it inline with the latest iPad and even launching a version without a cover/keyboard is a big failure imo.

the better twin said,

Same. I love the Surface, the design behind it is fantastic and the guys did a fantastic job with that aspect, but pricing it inline with the latest iPad and even launching a version without a cover/keyboard is a big failure imo.

It's not inline with the latest iPad because it's cheaper. Also, how is it a failure to launch a version without a cover? People are obviously choosing this version and then buying a coloured cover which costs more so customers are happy and Microsoft's happy. It seems like an obvious move to me and I'm surprised the option doesn't exist for the 64GB version.

Hackersoft MS MVP said,
I agree with the guy. I think the highest Microsoft should have charged for this is $399. Lower res screen, no GPS etc. Plus Apple is launching their iPad mini today priced at a rumoured $249 (8Gb) and going up from there. I think Microsoft goofed on the pricepoint for this.
I was going to get one but not anymore at that price.

iPad WiFi doesnt have GPS either. it is lower capacity and less features with the same price as Surface and other Windows 8 tablets.

With the exception of Apple and Apple stockholders, why should anyone be afraid exactly? I can't get over how dumb these "afraid" comments are. Everyone with €480 can go to a store and buy a Surface eventually. If you own an iPad you can always sell it.

lookus said,

Where's that reveiw now? It says page not found..

Try again, it loaded fine for me after I read your comment

Despite Microsoft's Surface tablet being priced $100 cheaper than an equivalent Apple iPad, one analyst says the upcoming Microsoft tablet is too expensive.

On the other hand it also comes with a much lower res screen. You win some, you loose some. And no, I don't care what that Microsoft researcher says.

Personally I think Surface is fairly reasonably priced. It's the Touch Cover that's insanely expensive.

.Neo said,

On the other hand it also comes with a much lower res screen. You win some, you loose some. And no, I don't care what that Microsoft researcher says.

Personally I think Surface is fairly reasonably priced. It's the Touch Cover that's insanely expensive.

Compared to the covers for the iPad which aren't a keyboard as well, the most expensive I've seen being £59.99 from Overclockers but the price varies, I don't necessarily agree that the touch cover is that expensive.

neo158 said,
Compared to the covers for the iPad which aren't a keyboard as well, the most expensive I've seen being £59.99 from Overclockers but the price varies, I don't necessarily agree that the touch cover is that expensive.

And those are overly expensive as well.

.Neo said,

And those are overly expensive as well.

Exactly, when I ordered my Surface I got one with a touch cover for £479. Compare that to the iPad where you have to buy the cover separately and I feel that Surface is the better deal.

neo158 said,
Exactly, when I ordered my Surface I got one with a touch cover for £479. Compare that to the iPad where you have to buy the cover separately and I feel that Surface is the better deal.

Last time I checked you don't have to buy a €90 costing iPad cover, you can get one for €39 as well.

.Neo said,

Last time I checked you don't have to buy a €90 costing iPad cover, you can get one for €39 as well.

True but I was comparing the Genuine Apple version not a cheap knock off, the touch cover is more than a cover though.

.Neo said,

On the other hand it also comes with a much lower res screen. You win some, you loose some. And no, I don't care what that Microsoft researcher says.

Personally I think Surface is fairly reasonably priced. It's the Touch Cover that's insanely expensive.

on the screen thing. I think a lot of what microsoft has said is spin. But i do believe the point is that in perfect conditions it isn't as good as the iPad, but in other settings. i.s. sunlight, on an angle, etc. It performs better

neo158 said,
True but I was comparing the Genuine Apple version not a cheap knock off, the touch cover is more than a cover though.

You can get an Apple Smart Cover for €39.

Dot Matrix said,
They're sour grapes because the Surface isn't some bargain bin special like Google's and Amazon's junk is.

I think some consumers think that win8 devices are priced higher just because MSFT and OEMs are greedy. That is what they cost to make. Cheap google/amazon devices aren't bad, but they are just bribes to get people in ecosystem

guys...when you see the world "analyst" you know it's actually "i have a vested interest and own the stock of <insert competitor>"

What a retard..

He has no idea :\ Compared to lower class devices and was generally balls up ignorant.

I bet his parents are proud.

articuno1au said,
What a retard..

He has no idea :\ Compared to lower class devices and was generally balls up ignorant.

I bet his parents are proud.

I'm not sure you could be any more over-dramatic if you tried.

articuno1au said,
What a retard..

He has no idea :\ Compared to lower class devices and was generally balls up ignorant.

I bet his parents are proud.


Hahaha lol man! Made my day!

articuno1au said,
What a retard..

He has no idea :\ Compared to lower class devices and was generally balls up ignorant.

I bet his parents are proud.

I think the point is that the iPad 2 is well-known, but the Surface isn't. The general public won't buy the Surface if it's more expensive. People that know what it can do, sure, they will, but not most. If you don't believe that, then let's see how many of these get sold compared to the iPad.

Apple and their iProducts have an established reputation and cost premium price.. Microsoft and The Surface do not; so pricing it near the iPad level is not a good idea. ESPECIALLY when people can buy Google Nexus 7 for half the price.

MindTrickz said,
Apple and their iProducts have an established reputation and cost premium price.. Microsoft and The Surface do not; so pricing it near the iPad level is not a good idea. ESPECIALLY when people can buy Google Nexus 7 for half the price.

The Surface does a lot more than the Nexus 7 though and no one actually thinks the Nexus 7 competes with the iPad in specs or features.

dagamer34 said,

The Surface does a lot more than the Nexus 7 though and no one actually thinks the Nexus 7 competes with the iPad in specs or features.

Yes. I think msft purposely priced the device on par with the iPad because they didn't want it to been as an inferior device. The nexus 7 is nice, but everyone knows Google is losing money on those just to get people to buy into the android system. If msft wants to increase their hardware basis, not just move devices, then they should price the device at value.

Are 7 inch tablets even selling well? As far as I know all of the 7 inch tablets combined sell less than the ipad.

Edited by Gaffney, Oct 23 2012, 2:54pm :

Gaffney said,
Are 7 inch tablets even selling well? As far as I know all of the 7 inch tablets combined sell less than the ipad.
Yes, 7 inch tablets are doing fine. You have Nexus 7, Kindles, Nook, Galaxy Tabs, and soon rumored iPad Mini... The 7" tablet market is doing just fine. Microsoft should've taken (more of) a loss on these tablets if they want any sort of market share. Since the Surface is a newcomer, it will have to offer a low price point, some amazing feature the iPad or Android tablets don't have, to sell well. Otherwise, most consumers will probably overlook it. But, let's see how the market plays out.

Jose_49 said,
Why compare it with an iPad 2 when it's indeed superior than it in every way?

He's an analyst after all. They don't really think things through.

Wait, you want a 10 inch tablet with a metal body to be priced the same as a 7 inch tablet made of plastic?

Sraf said,
Wait, you want a 10 inch tablet with a metal body to be priced the same as a 7 inch tablet made of plastic?

If Windows 8 ecosystem was well stablished that could be even a cheap price for such a great hardware but the fact is windows 8 is yet to be born platform. windows store doesn't even have essential application for good sake. even primitive apps are still missing. so comparing it to ipad which has been around for more than 5 years is out of context

S3P€hR said,

If Windows 8 ecosystem was well stablished that could be even a cheap price for such a great hardware but the fact is windows 8 is yet to be born platform. windows store doesn't even have essential application for good sake. even primitive apps are still missing. so comparing it to ipad which has been around for more than 5 years is out of context

So when the iPad was new, should it have been priced more in line with Netbooks? When the Samsung Galaxy tab 10.1 came out, should it have been cheaper than the iPad?

The Surface is a premium device, like it or not. It should be priced as it is, as a guide to OEMs on how to make their wares properly. THE BEST THING that can come out of this is if MS' OEM partners (who seem to be insisting on using this same price, but with cheaper designs and materials) smarten up and start making nicer hardware designs at lower prices

MS can keep the premium spot in the Windows RT tablet world so long as the other OEMs keep making crap (Like that Dell, one story up. You think that the Surface is overpriced? I think that Dell is overpriced)

If you sit and compare the Surface to the iPad and try to say well its cheaper because it has more storage then i can go yea but the iPad has GPS and a higher resolution screen...

micro said,
If you sit and compare the Surface to the iPad and try to say well its cheaper because it has more storage then i can go yea but the iPad has GPS and a higher resolution screen...

Which are good points, and a good reason why the Surface probably doesn't cost the same as the iPad 32GB

micro said,
If you sit and compare the Surface to the iPad and try to say well its cheaper because it has more storage then i can go yea but the iPad has GPS and a higher resolution screen...

Resolution alone is not the be all and end all of screen picture quality, though I do think they should've included GPS. Perhaps they'll release a little USB GPS receiver at some point down the line? Which of course is the kind of think you CAN do on the Surface seeing as it has a USB port (and expandable data storage with microSD)

micro said,
If you sit and compare the Surface to the iPad and try to say well its cheaper because it has more storage then i can go yea but the iPad has GPS and a higher resolution screen...

Ordinary people are not so tied to specs. But the price... oh yeah. Thus the iPad is an APPLE product, they think. Microsoft ignores this fact, behaving like Sony... It's a Sony, but... who cares about that in 2012?

micro said,
If you sit and compare the Surface to the iPad and try to say well its cheaper because it has more storage then i can go yea but the iPad has GPS and a higher resolution screen...

iPad has GPS only if it is the cellular model, the WiFi only versions do not have GPS. That said, I was very disappointed that Surface did not have GPS nor NFC.

nohone said,

iPad has GPS only if it is the cellular model, the WiFi only versions do not have GPS. That said, I was very disappointed that Surface did not have GPS nor NFC.

It does not bother be since I will be getting a Nokia 920 which has GPS and NFC.