Report claims $199 Surface tablet has OEMs nervous

We recently reported that a new rumor suggested that the Surface RT could sell for as low as $199. While we are not holding our breath that it will come true considering what Microsoft has said in the past about the price point for the product, apparently the news has made enough waves to put OEMs on the edge of their seat.

In a report from Digitimes, who has an accuracy rating of 40% via Tracour, the site states that vendors are quite nervous that Microsoft could introduce a tablet at that price point and if so, they would consider pulling out of the Windows RT market. We should note that Digitimes did accurately predict, nearly a year before it happened, that Microsoft would build it's own tablet. This would suggest that they do have decently placed sources for this kind of information. Digitimes quotes an inside source with the following:

However, if the rumored price is true, Microsoft's Windows RT partners such as Asustek Computer, Lenovo, Samsung Electronics and Dell may all halt their development, leaving Microsoft to play in the Windows RT market by itself, the sources noted.

What is not revealed is if the source has its own information about the $199 price point or if it is a new source of information backing up the $199 price point.

It will be quite interesting to see if Microsoft does offer the Surface RT at the $199 price point because if they do, the royalties lost on Windows RT licenses could be significant if they are the only player in the low cost Windows tablet market.

Microsoft has yet to comment on the pricing for the tablet and we don't expect them to respond to the pricing rumors either. But, we should have our answer on the true price of the Surface tablet very soon as the product will launch at the end of October along side the public release of Windows 8.

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I would buy the tablet over the Nexus 7 any day if it was only $200. The only thing I wonder is how limited Windows RT will be

OEMs *should* worry.

Most of them are probably just waiting to unload a ton of shoddy, expensive plastic tablets on consumers this fall. I'm looking at YOU, Acer.

What about the ala carte option. The Surface itself is $200. The buyer can then mix-and-match the various "accessories". It's the accessories that are HOT, and probably pricey.

flexkeyboard said,
Are you saying if it was $600, then you would only buy one of them ? heheh

If they were $499 or more, I'd be looking at options from other OEMS. Microsoft probably doesn't want that. So I can see the price point being anywhere from $199-$399

I've seen people suggest the $199 price would come with some sort of subscription, "similar to Xbox", but why is nobody considering that it might actually be an Xbox Live subscription that would come with the $199 price point?

In big ways, the Surface RT can be directly marketed as an Xbox companion device. It offers Wii-U style integration with the Xbox, full access to the Xbox ecosystem, and even a sort of Xbox "to-go" iteration in Live games.

And yet, I can't find ANY articles wasting a single brain cell on the idea. I personally think it makes a lot of marketing sense. *shrug*

Joshie said,
I've seen people suggest the $199 price would come with some sort of subscription, "similar to Xbox", but why is nobody considering that it might actually be an Xbox Live subscription that would come with the $199 price point?

In big ways, the Surface RT can be directly marketed as an Xbox companion device. It offers Wii-U style integration with the Xbox, full access to the Xbox ecosystem, and even a sort of Xbox "to-go" iteration in Live games.

And yet, I can't find ANY articles wasting a single brain cell on the idea. I personally think it makes a lot of marketing sense. *shrug*

They already call it smart glass. In my Win8 Pro I can control music from Xbox music on the Xbox. So it already is a companion device.

ShiZZa said,

They already call it smart glass. In my Win8 Pro I can control music from Xbox music on the Xbox. So it already is a companion device.


Yes...that was my point. That that's what it is, therefore they could market the Surface RT specifically as that sort of device, and sell it as $199 with a gold account or something.

It's the difference between having a set of features and making those particular features the focus of marketing.

If they do sell it at $199.99, I think it will come w/o the keyboard cover, or other accessories. So if you add the keyboard cover and others, the price will go up around $300. This will give a small windows for the OEM to compete.

I can see them doing that but only at 8GB of storage. 16GB for $299, 32GB for $399, 64GB for $499. Most people will not get the $199 anyway with that little storage

ACTIONpack said,
I can see them doing that but only at 8GB of storage. 16GB for $299, 32GB for $399, 64GB for $499. Most people will not get the $199 anyway with that little storage

Don't forget the expandable storage.

Well it might be cheap..but for 200$ it will sell a lot. Now the market has shown that 200$ is the sweet spot for near impulse tablet purchase. As seen by the NC, Fire, and now Nexus.

To me all tablets are the same regarding apps. I can find an app for doing stuff on each. music, movies, books, calc, cal, email, fb, camera, etc, etc, etc.

I would like to see how this handles file uploads. If it easy as an Android thats great. If its like the ipad where need to use special software...meh.

I do bet OEMs are a bit scared. If this does well it messes with their business model. They will need to produce better product and change things up again. This costs them money

$199 Surface from Microsoft is not happening, if it does, it would be a piece of sh*t. The OS it self is costy..

The OS is costly for OEMs, Microsoft loses nothing by building their own tablet. A $199 model, with low storage makes sense - even if it has to be subsidised, it puts more W8 devices in the hands of users. They'll make it back on app & accessales sales.

Hardware subsidies is a normal thing, look at the PS3. Even with its high launch price it was still a big loss to Sony on each one sold. Software and add-ons is where the real money lies for mass sale items.

There is no way (even without accessories) that the surface will sell for $199. Firstly MS said the prices would be comparable to current tablets and this was before the Nexus came out for $199. Secondly, and though they have to be at a lower price than the iPad it can't be too low otherwise they will have real big issues with the hardware OEMs and MS could do without any more competition. Thirdly, it's not sustainable because it clearly costs at least 40% more than that to make and if they are going to sell a few million as they stated it would be a massive hit on their profit margin (even with other services bundled). Lastly, whilst bundling other services is a good thing for MS they can't use it as the main vehicle to sell Surface because a large number of folk buying surface may not want to purchase an Xbox or may already have one.

It all comes down to what they offer. If a base model at $199 comes out with 8gb storage and WiFi only, and they price a 16gb model with 3G at $299 or higher, they spread their costs evenly, and having a subsidised lower model is not actually a huge deal.

This is not just about Surface, this is about moving Windows 8... if a person buys their Surface and likes their W8 experience, they could well buy an upgrade for their desktop machine too. That pushes another license.

If the $199 model exists, it will be barebones - I would almost definitely say 8gb with WiFi only. Which makes the next model up mighty tempting, if it's "only" an extra $50 or $100.

Bwahaha, too bad Lenovo already mentioned that they will offer RT tablets at the same price. Poor Acer (((

/sarcasm

40% Accuracy. Anyone can make guesses and get around 50% accuracy.

Their source says that if Microsoft's Surface is priced at $199 then all of those manufacturers will not manufacturer a tablet. That is one heck of a source to have that inside information from all of those manufacturers. I say BS.

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