Opinion: Microsoft Surface could be a huge hit at $US199

Selling the Surface tablet for a mere $US200 could be a winning strategy for Microsoft.

$199? An anonymous inside source told Engadget that the Microsoft Surface RT tablet will sell for the amazingly low price of only $199. It would be out of character for Microsoft, but if the pricing is truly that aggressive the Windows tablet could quickly claim significant market share.

Onuora Amobi of Windows8Update.com writes, I am skeptical of this story for one reason and one reason only--it would be so brilliant that it would be inconsistent with the moves Microsoft have been making.

Amobi adds, at $US199, it would be sold out on day one and would create huge Windows 8 buzz on day one. It would get Windows 8 into the homes of millions of adults, children and students immediately.

Would it upset Microsoft's OEM partners? Probably. Asus, Dell, and others don't have Microsofts cash and probably cant sell the device at a loss like Microsoft can. However, it may be beneficial for all parties if Microsoft can claim some tablet market share for Windows 8 out of the gate.

A larger audience would fuel developer interest. More apps, more functional apps, and better quality apps will help drive adoption by businesses and consumers. Rinse and repeat. Without an audience, developers will quickly lose interest.

At $US199 the tablet would be almost too good to pass up, and would almost definitely be a huge sales success. The problem might be that once Microsoft sets the bar at $US199 customers may balk at higher prices down the road, which could be an issue for both Microsoft and its partners.

It may not drive sales right out of the gate, and it seems to upset many customers, but perhaps the Apple strategy is better? The iPhone originally retailed for $599. Two months later Apple slashed the price to $US399. Now, it has been available for $US199 with a two-year contract for years, and Apple is selling millions of them.

If you start at $US600, $US200 becomes a steal. If you start at $US200 and you later try to raise the price, customers just feel like they're being ripped off.

I can say this much. At $1000 I would not buy a Microsoft Surface tablet. At $US600 I'd consider it. At $US200 it would be a no-brainer. I might buy two.

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Tony Bradley

PC World (US online)
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