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

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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