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Report: Microsoft Surface Tablet Costs at Least $300 to Make

By - Source: Digitimes | B 40 comments

Say goodbye to the $199 price point for Surface.

If Digitimes' information is correct, it is rather unlikely that Microsoft will be selling its highly anticipated Surface tablet for less than $200. The Surface RT hardware is estimated to cost somewhere between $300 and $400. The sources suggest that the "end-price" will be "less than $399".

Previous rumors that Surface will sell for $199 are now more wishful thinking than a likely reality. Selling the hardware more than $100 below the hardware cost, and shouldering all secondary cost would not be unusually aggressive for Microsoft. But it may be segment suicide that will not just affect Microsoft, but also its partners that would have to follow suit and offer $199 tablets as well. In a most aggressive case, Surface RT could be launching for $399, while we believe that a $499 price is much more likely given Microsoft's confidence in its product.

Also, let's remember that Microsoft has no history of severely discounting its product even under heavy pressure. This includes the now-dead Zune music player, which was launched against Apple's iPod, in a similar way as Surface is launched against the iPad, in late 2006.

The x86 version of Surface will be more expensive. The report states that the hardware cost of x86 Surface tablets will be between $400 and $500 and final products may cost somewhere between $500 and $700.

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  • 6 Hide
    southernshark , September 19, 2012 1:22 PM
    I don't see the RT tablet going anywhere.

    MS should have just focused on the x86 tablets and tried to bring prices under control. MS should not put any money into the RT version and should not waste money on developing software for it.

  • -1 Hide
    kungpaoshizi , September 19, 2012 1:23 PM
    I will buy it, no matter what. I would prefer lower to higher cost. But of course even though I use all of their products and despise Apple because they charge so much for everything, I still call the company Microshaft.
  • 9 Hide
    bllue , September 19, 2012 1:23 PM
    The sweet spot for me would be $299-399 for the RT and $499-699 for Pro. $499 for RT sounds a bit too much I would probably think twice about buying it at that price.
  • -8 Hide
    killerclick , September 19, 2012 1:29 PM
    southernsharkMS should have just focused on the x86 tablets and tried to bring prices under control. MS should not put any money into the RT version and should not waste money on developing software for it.


    Seeing how Microsoft's goal is to kill off desktop Windows as soon as possible, I think the reverse may be more likely.
  • 2 Hide
    duaxx , September 19, 2012 1:33 PM
    If MS really wants to succeed they have to keep the price as low as possible, even if they have to absorb some of the cost (especially for the RT because people will be purchasing from the W8 store). They really should consider pricing the RT at a price that's lower than the iPad
  • 1 Hide
    sch4mmer , September 19, 2012 1:40 PM
    Surface RT is the answer to iPad and Kindle. Surface Pro answers to nobody.
  • 3 Hide
    frombehind , September 19, 2012 1:41 PM
    I'm sorry, can someone please explain to why ANYONE would want the surface... that (while a bit cheaper) CANNOT run x86 programs, and has no established device-specific app base. In case no one noticed, ppl dont spent over 500 bucks on current tablets to read email. The massive app base is the primary selling point of these devices is a sea of similar hardware.

    On the other hand, I am waiting for "the real" tablet with baited breath... I have no issue paying a small premium for the ability to run all my x86 software on what looks to be a decently spec'ed tablet
  • -1 Hide
    bustapr , September 19, 2012 1:42 PM
    i dont really care about any tablets at the moment, but Im sort of following this W8 tablet launch cycle. I really dont know how microsoft expects to succeed in the RT market. If it costs them $300 just to make their own tablet, how much will it cost OEMs who are paying an extra $80. If miscrosoft intends to succeed with W8 RT, they HAVE to sell cheaper than the iPad and so do the OEMs. That also means that if microsoft intends to have OEMs contributing to its success, they have to sell it to OEMs alot cheaper.
  • -5 Hide
    vistaofdoom , September 19, 2012 1:48 PM
    frombehindI'm sorry, can someone please explain to why ANYONE would want the surface... that (while a bit cheaper) CANNOT run x86 programs, and has no established device-specific app base.

    U most be an apple fan... there will be a surface x86/x64... Dont know the terms? go back to mac.
  • 6 Hide
    CaedenV , September 19, 2012 1:55 PM
    who on earth though the surface RT would be $200? All the rumors I have heard from the first announcement were speculating an entry price of $300, to a 'high end' price of ~$600

    Now, I have been hearing rumors that the new B&N tablet will be $200 and include win8RT. That would be a great feature vs price point for entry level tablets that I think would sell very nicely. But then again it is just a rumor, so take it with a grain of salt. Personally I don't really care for the tablet form factor. I like big phones because I don't expect much so anything it can do is a nice plus, and I like desktops because you can add whatever you want to them; But the whole laptop/netbook/tablet form factor just has too many compromises for me, they are more of a necessary evil.
  • 2 Hide
    mcd023 , September 19, 2012 2:12 PM
    I'm guessing about $500 for the RT, mostly for build quality and the keyboard bit and about $800 fro the Pro. I forgot the processor speed, but $800-$900 is what I'm guessing, but more on the $800 side. btw, I'm looking forward to the surface pro. If I do decide to go with that model, the lightness and versatility will be very welcome, since I travel a lot. My Asus G51VX is great, but super heavy. These new IvyBridge cpus will probably perform about the same as the Core2Duo, even when I overclock it to 2.4GHz
  • 0 Hide
    friskiest , September 19, 2012 2:15 PM
    @frombehind, you ought to read more before posting here,. there will be two versions an Surface RT (ARM) & Surface Pro (x86/64)- of which the latter will be able to leverage the thousands of programs available now for the traditional PC,. you know, those productivity softwares that really matter.
  • 4 Hide
    super d spamalot , September 19, 2012 2:26 PM
    killerclickSeeing how Microsoft's goal is to kill off desktop Windows as soon as possible, I think the reverse may be more likely.


    Windows RT is still Windows, even if the only point of software entry is the Windows Store. Expect to see the Windows Store have the same, if not more, applications available than iOS within 2 years due to the fact that there have already been millions of application written for windows, all the developers of that of that software have to do is port it to run on ARM, and adapt it to whatever constraints MS will put on apps sold in the store... which will take very, very little effort (Search for the story where Unreal Engine 3 was ported to Windows RT because it was much, much easier then making a special mobile version which would have had to be done to use it on iOS or Android). Very little effort to make extra money = an instantly huge dev community from day 1.

    Also expect the lion's share of those applications to actually be useful. iOS may have hundreds of thousands of apps, but I'd be shocked if even a tenth of them are useful or unique.
  • 0 Hide
    super d spamalot , September 19, 2012 2:28 PM
    Sorry, I quoted the wrong post. That reply was meant for "frombehind"
  • 0 Hide
    bigdog44 , September 19, 2012 2:44 PM
    I haven't read up on surface on the tablet. Does the UI automatically integrate/translate its new input on pre-existing apps, or does it require new/re-written ones?
  • 0 Hide
    fernandogmd , September 19, 2012 2:51 PM
    Extremetech have posted this report with a grimmer picture:
    http://www.extremetech.com/computing/136368-leaked-windows-8-tablet-pricing-suggests-microsoft-may-have-already-lost-the-war-and-its-marbles

    If these prices are real the situation is way worse than you guys picture it!!!!
    I´m no fan of tablets or windows but I don´t see microsoft succeeding, exept perhaps in enterprise applications
  • 1 Hide
    ojas , September 19, 2012 2:57 PM
    southernsharkI don't see the RT tablet going anywhere.MS should have just focused on the x86 tablets and tried to bring prices under control. MS should not put any money into the RT version and should not waste money on developing software for it.

    Believe it or not, the RT version might be the one sold the most.
  • 4 Hide
    boiler1990 , September 19, 2012 3:51 PM
    frombehindI'm sorry, can someone please explain to why ANYONE would want the surface... that (while a bit cheaper) CANNOT run x86 programs, and has no established device-specific app base.


    First off - even on the ARM-based RT tablets, you get a full Office suite, something that NO ARM-based tablet currently has (you could argue Apple's iLife suite, but unless you're bought into Apple's ecosystem you use Office). The best others can do are imitations that don't have nearly the same feature set, especially if you do things like grad school papers that require mathematical equations.

    Secondly - Microsoft is taking an interesting approach with W8. All versions of the OS are running common code, which means apps written for one W8-based device only need tweaks to run on other devices. This is something that Apple hasn't even done - iOS and Mac OS don't share common code (or at least, as much as MSFT is using). RT is an interesting idea because it bridges the full-functionality of W8 Pro and the ease of writing apps for WP8, so I would expect to see some inter-compatibility between apps on your WP8 and RT devices (think iOS on the iPad + iPhone).

    Thirdly, and probably most importantly - RT is meant to keep device costs down. Lower device costs = greater sales, regardless of the profit margins. I doubt RT devices will be hot sellers at $500, but I imagine that the Surface will be somewhat higher quality than OEM devices (which will probably cost less, since companies like Asus have gotten great at lowering costs - e.g. Nexus 7).
  • -1 Hide
    bustapr , September 19, 2012 3:58 PM
    boiler1990First off - even on the ARM-based RT tablets, you get a full Office suite, something that NO ARM-based tablet currently has (you could argue Apple's iLife suite, but unless you're bought into Apple's ecosystem you use Office). The best others can do are imitations that don't have nearly the same feature set, especially if you do things like grad school papers that require mathematical equations. Secondly - Microsoft is taking an interesting approach with W8. All versions of the OS are running common code, which means apps written for one W8-based device only need tweaks to run on other devices. This is something that Apple hasn't even done - iOS and Mac OS don't share common code (or at least, as much as MSFT is using). RT is an interesting idea because it bridges the full-functionality of W8 Pro and the ease of writing apps for WP8, so I would expect to see some inter-compatibility between apps on your WP8 and RT devices (think iOS on the iPad + iPhone).Thirdly, and probably most importantly - RT is meant to keep device costs down. Lower device costs = greater sales, regardless of the profit margins. I doubt RT devices will be hot sellers at $500, but I imagine that the Surface will be somewhat higher quality than OEM devices (which will probably cost less, since companies like Asus have gotten great at lowering costs - e.g. Nexus 7).

    oems like asus might find ways to make things cheaper like they did with nexus7, but you also have to take into account that microsoft doesnt pay for W8 on the surface while OEMs have to shell out $80 for each tablet. Thats a pretty big deal that will prevent alot of OEMs from selling cheaper high quality tablets. i believe theres going to be too many compromises in the sub-$500 W8 RT tablet market.
  • -6 Hide
    Prescott_666 , September 19, 2012 4:53 PM
    I will not get a Microsoft Surface RT Tablet this year, because they are too expensive, there aren't enough apps, and I demand that they support the Remote Desktop Client. Even if they get cheaper, and by cheaper I mean under $299.00, and the apps I want become available, I don't think Microsoft will add Remote Desktop to the RT Tablet, so I will never get one.
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