I have been loosely following Windows 8 tablet news ever since Microsoft unveiled its lineup of Surface tablets and their partners earlier announced Windows RT tablets. Being the tablet fiend that I am, Windows RT is easily the most intriguing thing to happen to the tablet sector yet. In theory, it could allow me to work entirely from a tablet and leave the MacBook at home, which sets the nerd factor unbelievably high.
Just as any new product, however, these Windows RT products are walking a very thin line. In an unpredictable market such as the tablet sector, price is everything. It can be the difference in wild success and a heartbreaking failure. Unlike their Windows Pro compatriots, which feasibly warrant a heavier price tag than the ARM-based tablets we've come to love (that were originally viewed as "overpriced", mind you), Windows RT tablets will have to be very competitively priced.
Just three weeks ago, a Swedish website by the name of Webhallen listed four Surface models on their e-commerce site: Surface for Windows RT 32GB, Surface for Windows RT 64GB, Surface for Windows Pro 64GB and Surface for Windows Pro 128GB. Using the conversion rate between the Swedish Krona and USD on July 26, the price translated to $1,019.63 for the smaller capacity Windows RT tablet and $2,186.58 for the largest capacity Pro.
Needless to say, we all were a bit skeptical – we have been since Surface was announced. But the pricing on Webhallen had us on edge, questioning the real pricing of Surface tablets and wondering whether Microsoft would blow their one chance at being their own manufacturer. Luckily, the Swedish site had only picked an improbably high starting price for the tablets to open pre-orders to those who wanted them. A commenter on my article from July pointed me to techie buzz, which quoted Webhallen:
"Our customers are very interested in pre-ordering these products, so we have set a high preliminary pricing for the lineup so that they may be able to pre-order them.
Just to clarify, we have not received any pricing from Microsoft regarding MRSP or purchasing net cost, and any people who have booked the Surface at this high price will of course have their order adjusted before any product is shipped. So we’re not going to overcharge anyone for being an early adopter."
The issue was never that I – or anyone, for that matter – believed Webhallen's ludicrous pricing. But it brought to our attention just how horribly wrong this entire launch could go.
As I said, pricing is everything. And even at $600, I would have to question whether I should buy a Windows RT Surface or not, much less $1,000. Considering Microsoft is putting a lot on the line, like allegedly cannibalizing their own partners by creating competition with their self-manufactured tablets, they need to remove all doubt, be willing to lose a little in terms of money in the name of market share.
Market share is important, and so is mind share. Look at what the fire sale of the HP TouchPad did for webOS. While I won't speak on HP's series of horrible decisions, it caused a massive, almost immediate influx of webOS market and mind share in the tablet realm.
The easiest way to do imitate this is through price extremely competitive pricing. Look at the Google Nexus 7 by ASUS or the Kindle Fire. Priced below cost, these two gadgets are easily two of the most popular Android-powered tablets to date. While Microsoft might have a tough time making up for the losses in profits like Google and Amazon have done through their digital content stores, Microsoft doesn't necessarily have to price Surface tablets below the cost of manufacturing either. But shaving away money on the top end could seal the deal for a large number of consumers.
Digging into profits isn't all bad either. A sudden boost in market share and getting the product into the hands of millions of customers without squabbling over price is a tactic far too many manufacturers are afraid to express. (And many companies seem to forget they aren't Apple and not just anyone will fork over too much money for their products.)
Shouldn't taking from the likes of Apple and the iPad be well worth the profits spared? Microsoft has already taken several risks in manufacturing their own tablet. Why not take another risk and minimize the odds of complete and utter failure.
If a recent report from Engadget is to be believed, this may be exactly what Microsoft is pondering. Coming from our own Alex Wagner yesterday:
"A source speaking to the site claims that, at a session held during Microsoft's TechReady15 conference, the company revealed that it plans to price the Surface for Windows RT at $199 when it launches on October 26."
As much as I want to believe the report, I'm not holding my breath. While I certainly would not complain if the rumor panned out, the price almost seems too low. At $199, the 10.6-inch Windows RT Surface tablet would be competitively priced against other 7-inch Android tablets. Such a low price tag could translate to two largely different implied statements by Microsoft: either they're doing exactly what I explained above and trying to force the competition down a cheaper pathway or they have absolutely no faith in their product. My money goes with the former, but I definitely wouldn't rule out the latter.
No less, if the bottom tier Windows RT Surface initially sells for $199, mark me down for two, plus one Touch Cover and a Type Cover. Even at $300, I would consider two Surface tablets. I've never been one to turn down affordable tablets, and I definitely don't plan on starting with the Surface. But it's safe to remember the price still isn't set in stone. If it's much over $300, I'll be weighing my options.
Where do you stand, folks? What would your pay for a Windows RT Surface tablet? $300? $400? How many would you buy if they were priced competitively with the Nexus 7?
