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.

Report a problem with article
Previous Story

Castle Crashers for PC announced

Next Story

Microsoft talks about touch features in Word 2013

50 Comments

Commenting is disabled on this article.

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.

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

/sarcasm

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.

$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.

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

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.

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'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.

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

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.

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.

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

Flee to Google and compete with the $199.99 Nexus 7? You forget to take your pill this morning darling?

Edited by flexkeyboard, Aug 16 2012, 9:27pm :

the rumor has clearly been put there to check the reaction of the people and the OEMs.

also, if they sell the tablet for $200, watch those keyboards and mice cost an arm and a leg.

and let's not forget that the surface RT is locked to metro mode.... right now there's not enough quality apps to make it worth your while any more than a blackberry tablet.

Julius Caro said,
the rumor has clearly been put there to check the reaction of the people and the OEMs.

also, if they sell the tablet for $200, watch those keyboards and mice cost an arm and a leg.

and let's not forget that the surface RT is locked to metro mode.... right now there's not enough quality apps to make it worth your while any more than a blackberry tablet.


RT has a desktop, mostly for the office suite, something none of the other pads have. Check your facts next time

siah1214 said,

RT has a desktop, mostly for the office suite, something none of the other pads have. Check your facts next time

the Rt will only run apps from the Metro store with exception of Office, so atm the only thing the desktop function is for is to run Office ( and its a RT version of Office, not the full thing, which is why Office comes free with RT Tablets. everythign else runs in Metro

Hell-In-A-Handbasket said,

the Rt will only run apps from the Metro store with exception of Office, so atm the only thing the desktop function is for is to run Office ( and its a RT version of Office, not the full thing, which is why Office comes free with RT Tablets. everythign else runs in Metro

you also have the desktop Internet Explorer. And the Windows Explorer to take care of all your files and folders. So that's quite a lot on the desktop front!

Julius Caro said,

and let's not forget that the surface RT is locked to metro mode.... right now there's not enough quality apps to make it worth your while any more than a blackberry tablet.

Yep. As far as I'm concerned the RT surface offers me nothing that isn't already available in today's tablets. But the Windows 8 surface, now that I'm interested in. Unlike Apple, it gives me the ability to run full apps which is extremely appealing to me. It is a real computer in tablet form

I have a Playbook (which I quite like), and this still has me very interested. A tablet with a built-in real network capable file manager, full Office suite (or at least not 90% crippled like Docs to Go), network printing support, Flash-enabled browser and a first class Remote Desktop client for $200 on pretty high quality hardware with expandable storage?

Unless there is some surprise deal breaker, I'm definitely buying one.

drazgoosh said,
It's already got ME nervous, thinking whether it's possible or not.
It's possible.
"Buy a 2years subscriptions for XBOX LIVE GOLD and get a Surface RT for only $199!!"

Anthonyd said,
It's possible.
"Buy a 2years subscriptions for XBOX LIVE GOLD and get a Surface RT for only $199!!"

That is what I was thinking except that they'd want you to have XBox Live and XBox Music to get users completely immersed in those services.

Anthonyd said,
It's possible.
"Buy a 2years subscriptions for XBOX LIVE GOLD and get a Surface RT for only $199!!"

I'd do that, I make good use of Gold anyways

Anthonyd said,
It's possible.
"Buy a 2years subscriptions for XBOX LIVE GOLD and get a Surface RT for only $199!!"

As a Zune Music Pass and XBOX Live Gold subscriber, I would welcome such a contract to pay less for a Surface.

Anthonyd said,
It's possible.
"Buy a 2years subscriptions for XBOX LIVE GOLD and get a Surface RT for only $199!!"

It would have to be more than just gold but if this happens that is how I believe it will happen....

2 yr contract that includes xbox live gold, xbox music, skydrive paid storage tier and some skype credit. I would go for something like that.

Word. I would do the same. Does anyone know if previous zune owners and users get to keep their play count? I'm almost at 300,000 plays. Also the friends that are on my zune friends list.

jagowar said,

It would have to be more than just gold but if this happens that is how I believe it will happen....

2 yr contract that includes xbox live gold, xbox music, skydrive paid storage tier and some skype credit. I would go for something like that.

wetworker said,
Word. I would do the same. Does anyone know if previous zune owners and users get to keep their play count? I'm almost at 300,000 plays. Also the friends that are on my zune friends list.

As of right now in Win8 Pro my zune pass works in Xbox Music. It even looks like the XBox version for the most part.

Anthonyd said,
It's possible.
"Buy a 2years subscriptions for XBOX LIVE GOLD and get a Surface RT for only $199!!"

That would finally makes Live worth it in Canada.

Anthonyd said,
It's possible.
"Buy a 2years subscriptions for XBOX LIVE GOLD and get a Surface RT for only $199!!"

I would do that then sell the Xbox Live coupon to someone else.