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Microsoft Surface: $199 (?) (1 Viewer)

mattCR

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http://www.engadget.com/2012/08/14/microsoft-surface-199/




We'll admit to being a little blown away when Microsoft launched the Surface -- it was an impressively polished tablet that we had heard barely a whisper of leading up to the mysterious launch event. But, there was one thing that we were still left wondering: how much would it cost? Now, with Acer getting all in a huff about competition and Microsoft conceding that some OEMs might be a little upset when this thing ships, we might just have an idea for you. According to an inside source, a session was held at Microsoft's recent TechReady15 conference in which all the launch details were laid out. If things go according to the plan detailed then, the Surface for Windows RT tablet will be launching October 26th -- no surprise there -- at a compelling price of $199.

If this is true - this is the RT (ARM) version, not the higher end variant, but still.. if true, this just skyrockets up the list.. the $199 pricetag will put it in line with the Kindle Fire.. but with a Windows8 (ARM) core.. this could be a huge impulse buy platform
 

Hanson

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If they do this, it will effectively price out every other manufacturer (the Win8 RT OEM license is $85 alone) and will be a huge loss per unit for MS. An OEM could sell a $299 7" Android tablet and add some feature for the premium price. But getting in even under $400 for a 10" tablet when $85 of that kicks back to MS means no OEM will even bother.

Hard to see this happening at all, unless this becomes the second coming of the Kin and they're liquidating them.
 

mattCR

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Originally Posted by Sam Posten /t/322997/microsoft-surface-199#post_3962173
And as noted by others on twitter: In every other country besides the US this would be considered illegal dumping.

I don't know about that. If they can show they make up the money elsewhere, it's a different bag. Sony & Microsoft both took heavy losses on the PS3 & XBOX360 in their first 18 months. Even Nintendo sold the Wii at "break even" from the beginning (though quickly made a pile of cash). But yes, if they do it at $199, with their full backing - which seems likely - and since they've got a patent share agreement with Apple they've got a heads up very few others do as well as legal protection.. it's going to be... interesting.
 

Hanson

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I can't believe this is true. Think about it -- if they introduce their RT tablet at $199, that means a) not a single OEM will manufacture one because it's an instant money hole b) MS won't get a single penny from Win8 RT licenses c) they could never be able to sell a tablet for more than $199 and d) the loss MS would take would on each unit be enormous. Even if they took over this market segment (which is still no sure thing) it would be a pyrrhic victory at best.
 

Hanson

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And XBox is still losing money. Also, that was created as a HW/SW platform from the outset.They developed Win8 RT as an OEM OS -- not really going to happen at $199 or even $299. Are they shifting gears and making their RT tablet another XBox?
 

Sam Posten

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A. I believe this rumor is total fantasy
B. i dont think win RT will sell unless it is, in fact, 199 or cheaper
C. I have doubts it will sell in large volume even at 199
We will see tho! At 199 i would buy one to test.
I expect to install win 8 RTM tomorrow. Technet FTW.
 

mattCR

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RTM has been available for a while through MSDN, I thought it and TechNet received same(?) I'll have to check. I agree, we'll see.. In regards to "make it the XBOX" I think MS has made that a big part of their point; they've changed Windows Games to "XBOX on Windows" and have promised XBLA vendors sell through and tablet/desktop connectivity through a new XBOX refresh (and again through XBOX720) We'll have to see.. who knows what happens.
 

Sam Posten

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Are you sure about that? Sinofsky's post says you are supposed to get it tomorrow just like me:
http://windowsteamblog.com/windows/b/bloggingwindows/archive/2012/08/01/windows-8-has-reached-the-rtm-milestone.aspx
Not preview, RTM.
 

ManW_TheUncool

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How could this possibly go the way of X-Box though? What bucket loads of $50-60 (or even $10) games/apps are they planning to sell and can actually convince tablet users to spring for in order to recoup the $$$??? OR do they really have that much content to sell cheaply to yield the same effect???

Not like they can guarantee a fast ramp-up of marketshare afterall.

I guess Hail Mary it must be, if it's going to be anywhere near $199, which it perhaps will need to be given the state of the market at this point...

Then again, what next big thing might they actually have (or not) in their back pocket right now? Perhaps, this Hail Mary is more than just about their foray into the tablet market and mobile computing in general...

_Man_
 

mattCR

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Originally Posted by ManW_TheUncool /t/322997/microsoft-surface-199#post_3962491
How could this possibly go the way of X-Box though? What bucket loads of $50-60 (or even $10) games/apps are they planning to sell and can actually convince tablet users to spring for in order to recoup the $$$??? OR do they really have that much content to sell cheaply to yield the same effect???

Not like they can guarantee a fast ramp-up of marketshare afterall.

I guess Hail Mary it must be, if it's going to be anywhere near $199, which it perhaps will need to be given the state of the market at this point...

Then again, what next big thing might they actually have (or not) in their back pocket right now? Perhaps, this Hail Mary is more than just about their foray into the tablet market and mobile computing in general...

_Man_

Remember, they do plan to introduce the WindowsMarketplace and link the XBOX marketplace to it as well; allowing PC users to buy games to download to their XBOX using the device. More then that, several developers have committed to putting apps (not just games, but apps) into their marketplace for this.. whether it pays off or not, it makes sense.. though ARM will be a new venture for MS, so you'd expect the X86 "marketplace" to be a far better space to sell in. Still, if they sell through ARM MS Office, or ARM this and that.. hell, if they just sell a truckload of ARM Plants Vs. Zombies and they get a cut ;)
I'm not saying this is viable, on the PC (X86) side it definitely makes a lot more sense.. but it's clearly the strategy they are going to try, and only time will tell.
 

Hanson

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The only way this rumor makes any sense is if the $199 model is an unrevealed 7" tablet.
 

Sam Posten

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Not really, it's not impossible if it were true. I don't believe it is true and I think this rumor is going to hurt them when it is revealed to be really untrue....
Ars adds:
$199 is a crazy price for a well-built, well-designed, 10" tablet. It's not completely impossible, and there are ways in which the economics could be made to work. But the results for Microsoft and the PC OEMs alike would be nothing short of a disaster.
http://arstechnica.com/information-technology/2012/08/how-microsoft-could-make-a-199-surface-rt-a-reality-and-why-it-shouldnt/
 

Hanson

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I didn't say it was impossible, I said it wasn't sensible

BTW, that article had every single argument I was making.
 

Hanson

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Looks like the more likely price point is $400:

http://www.engadget.com/2012/08/17/windows-8-rt-tablets-to-sell-for-300-less-says-lenovo/



Quote:
David Schmoock, Senior VP of Lenovo's North American division, said that full-on Windows 8 tablets would ring up between $600 and $700, noting that ARM-based Windows RT slates would sell for $200 to $300 less. "RT will play in consumer and retail at very aggressive price points,"

If MS wants to cash in on their $85 license discount (at the expense of their OS division) they could shoot for $299. But $199 would make OEM tablets twice the price for the same specs, and no one would bother seriously making RT tablets. Even $299 will make the OEMs balk. I can see why Acer was pissed about the pricing -- they're putting out Android tablets at $499, but they would be losing $100 off the top by moving to Win8. I guess Acer and now Lenovo aren't in the loss leader field.
 

mattCR

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Originally Posted by Hanson /t/322997/microsoft-surface-199#post_3963411
Looks like the more likely price point is $400:

http://www.engadget.com/2012/08/17/windows-8-rt-tablets-to-sell-for-300-less-says-lenovo/



If MS wants to cash in on their $85 license discount (at the expense of their OS division) they could shoot for $299. But $199 would make OEM tablets twice the price for the same specs, and no one would bother seriously making RT tablets. Even $299 will make the OEMs balk. I can see why Acer was pissed about the pricing -- they're putting out Android tablets at $499, but they would be losing $100 off the top by moving to Win8. I guess Acer and now Lenovo aren't in the loss leader field.

Well, what's really happening is MS is saying: you can pay us for IP costs for using Android - because Acer and Lenovo both do; and now Apple wants patent kickbacks from them on their Google tablets, OR you can go to MS, who has an IP agreement with Apple, and you can pay more for the OS, sure.. but it's now coming down to less of a legal hastle and PITA then dealing with the patent fight associated at similar cost.

I'm not saying I like that, but it's a pretty compelling business case to make life difficult on Android tablet providers.. MS & Apple will just work to beat them up in court, pretty much.
 

Hanson

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But the OEMs still want a $499 tablet price point. They're not going to put food on the table at $399. Losing money is still losing money. $399 is either a "clear out inventory" price or "last year's parts" price. In a similar fashion, none of the other OEMs are even bothering to make a 7" tablet now that the Nexus 7 is $199. That market has been effectively ceded to Amazon and Google. It looks like MS will supply the RT tablets with the OEMs concentrating on the Intel versions. But at the same time, if MS decides to squeeze pricing for OEMs there as well, you won't have anyone but MS making Win8 tablets. That's why Google won't make a 10" tablet. The 7" market was pretty much lost when Amazon undercut everyone by half, so Google came in to pick up the pieces. If they moved into the 10" tablet game, the OEMs would go apeshit.
 

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