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Microsoft's Surface Tablets Price Could Start From $400 to $500

An analyst report suggests that Microsoft could sell its upcoming Surface tablets from $400 to $500.

While Microsoft has yet to announce the pricing for Surface (despite there only being a few weeks left until its release), one analyst believes the RT version of the tablet will be priced between $400 - $500 and the Pro between $799 - $899.

Sameer Singh from Tech-Thoughts bases his estimate on previous bill of materials (BOM) calculations for devices such as Amazon's Kindle Fire, Google's Nexus 7 and Apple's iPad.

For the RT version of Surface, Singh's analysis priced each of the following components: the display ($66.95), touch screen ($43.71), processor ($21), camera ($4.10), as well as its battery ($25.74), which equals a total of $308.82 when adding a $10 manufacturing cost.

"Microsoft would be under considerable pressure to ensure that the Surface is priced in the same ballpark as tablets from OEM partners," Singh said. "Unfortunately, OEMs are also at a cost disadvantage," he said, referencing the fact that third parties are required to pay a $50-$65 licensing fee per Windows RT device.

"OEMs could cut some of the costs mentioned in the BOM above to boost margins (for example, they could use a cheaper casing), but Microsoft's hardware requirements could make steep cuts a challenge," he added. "Including the license fee, I expect the BOM of most Windows RT tablets to fall within the $300-$350 range."

Consequently, Surface's RT version is looking likely to launch at the $399 - $499 price, with around 25 to 35 percent gross margin for Microsoft, Singh said.

As for the Pro version, it'll likely retail between $799 - $899. Along with the RT costs, the analyst estimated another $321.35 in BOM components for the Surface Pro, with the considerable portion of that price ($204) attributed to the Intel Core i5 processor.

Microsoft CEO Steve Ballmer had previously said Surface may release with a price tag between $300 and $800. Surface itself will launch alongside Windows 8 on October 26.

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  • Old_Fogie_Late_Bloomer
    I understand the need to not totally alienate OEMs but I feel like $400 is pushing it a little.
    Reply
  • COLGeek
    'Tis all about marketing at these prices. Profit will follow once demand is created.
    Reply
  • southernshark
    Old_Fogie_Late_BloomerI understand the need to not totally alienate OEMs but I feel like $400 is pushing it a little.

    Yeah its going to be an uphill fight given the iPad 2 at $399. But we will see. I'd rather have this than an Ipad 2. I do wish Nvidia would get its act together though and produce a follow up to the Tegra 3, which is getting a little stale.
    Reply
  • yobobjm
    That kind of kills it for me, there are things that I would rather spend that money on.
    Reply
  • Oh how I wish they would have release Pro before RT.
    Reply
  • Old_Fogie_Late_Bloomer
    That's the thing, you know? I'd rather have the Surface than the iPad, too, but as a consumer, I don't feel the need for either at that price. As a potential developer, I can't help but feel that this level of pricing makes Windows 8 devices uncompetitive.

    I made the comment on another article that the difference between $300 and $800 is the difference between my investing in Windows 8 development and writing the whole thing off. If the bare minimum pricing on Windows 8 tablets is $400, I just don't think people aren't going to bite in large numbers. If they're buying comparably-priced laptops, they'll probably be sticking to the desktop primarily. In that case, why would I develop for Metro?
    Reply
  • cknobman
    $400+ for the RT version with a crappy outdated Tegra 3 processor? Guess I wont be buying one then as I already have a Tegra powered tablet. Maybe I will wait until a device refresh happens with an updated processor comes out.

    $800+ for the Pro version primarily because of greedy SOB Intel? Intel you can kiss my @ss. I really wish they could find a way to fit a low powered Trinity APU into one which would cut the price by at least $100.
    Reply
  • jerrspud
    it comes out in a couple of weeks.. and we still don't know the real price?
    Reply
  • happyballz
    $800+ for a tablet? Not a chance. I would definitely buy a medium-end notebook that is more usable for $500 and spend $200+- on a cheapo tablet.

    Pricing seems crazy on high-end tablets.
    Reply
  • syrious1
    happyballz$800+ for a tablet? Not a chance. I would definitely buy a medium-end notebook that is more usable for $500 and spend $200+- on a cheapo tablet. Pricing seems crazy on high-end tablets.
    The Pro not a tablet. It's got laptop hardware i5/4GB/ram/SSD, please stop calling it a tablet and comparing it to an ipad or other android tablets.

    Reply