Could Microsoft’s new Surface tablet really cost only $199? We’re skeptical

We’ve been waiting with eager anticipation to find out how much Microsoft plans to charge for its Surface tablet computer, set to debut on October 26th. Well, as usually is the case when it comes to these types of gadgets, word is starting to leak out.

Citing an “inside source,” Engadget reports that the Surface for Windows RT will debut at a rock bottom price of $199. Sounds too good to be true, doesn’t it?

Well, we’re a bit skeptical of the report, in part because Microsoft said at the unveiling back in June that the Surface “will be priced like comparable tablets based on ARM.” We took that to mean more in the $600 range that you see for the latest generation iPads.

We’d love to see a $199 Surface, in part because it would radically undercut the iPad (not to mention many of Microsoft’s own hardware partners). See our previous report: Acer CEO warns Microsoft to ‘think twice’ about Surface.

A $199 price also would put it in direct competition with the Kindle Fire and Nexus 7, both Android-based devices.

One thing is certain.

Microsoft needs to do something bold in order to regain its mojo in the tablet arena. And one way that it can woo customers — many of whom already have purchased iPads or Kindle Fires — is to compete aggressively on price. We’ve talked repeatedly about Microsoft’s need to offer the device at a discount on the GeekWire podcast in recent weeks, but the indications seem to point that the Surface (with its TouchCover) would be more in the range of an iPad.

Microsoft declined to comment on the Engadget report. Maybe we’ll just have to wait another couple months to see where pricing actually ends up.

  • Guest

    $199 is an excellent price point. I’d buy a Surface for $199.

  • guest

    That would totally bone their partners. Perhaps they’ll do a doorbuster special on the first 1k per store, I could see that. But sell them all at $199? That would just be stupid.

    • http://techmansworld.blogspot.com/ncr Michael Hazell

      You think that OEMs are just going to drop Microsoft because they are releasing their own tablet? OEM’s rely on Microsoft so that they can put their OS on it to sell their products. Although if they do drop Microsoft, it would be nice if those OEMs carry another operating system such as the Ubuntu operating system.

  • http://frugalmechanic.com/ Eric Peters

    I would get in line for a $199 tablet, especially with both a rear + front camera, probably would wait for the Kindle refresh if the price point is higher than $199

    • http://blog.calbucci.com/ Marcelo Calbucci

      Just based on this rumor I’ll wait for the official price as well. My iPad broke the glass and it’s unusable. To fix will cost about $250.

    • john

      There is no reason for a front facing camera on a tablet. I cringe everytime I see someone taking a picture with their gigantic iPad.

      • http://frugalmechanic.com/ Eric Peters

        Skype. Having just had our first child, I’m in the market for a dual-camera tablet, so I can skype with my family and be able to watch/talk with them while showing my baby girl doing something cute :) I think it’s a killer application for the dual-camera tablets.

      • Guest

        That’s a rear-facing camera, John. A front-facing camera is good for videophonage.

  • ted

    Yesterday it was $1000 and today it is $199. I wonder what tomorrow brings…

  • Msillsux

    Same strategy as Xbox. Lose money on everyone sold. Make it up on volume…

    • guest

      Take a 30%+ margin business and lower that to the profitability of the xbox business? Yeah, that makes sense.

      • Agrippa

        You. I like you. You speak truth.

  • burntcustard

    You cannot build a tablet like the Microsoft surface for less than $199. Google/ASUS are barely breaking even on the hardware side of the $199 8GB Nexus 7, and that is much smaller and contains far fewer parts. Also, in some parts of the world, a retail copy of Windows isn’t much less than $199. Anyone who believes the insane low price doesn’t understand how money works.

    • Nathan O

      I would argue that you don’t know how MSFT works. MSFT has the money to burn, they implemented the same strategy with the Xbox. They took a loss on ever console sold for years until they could bring production costs down through mass production. You have to remember that MSFT is trying to sell you on an ecosystem and a brand, not just a product. If you buy their tablet you’ll buy their apps and their phones and their xbox and maybe a new Win8 desktop.

  • guest

    That sounds too low to even breakeven. But I guess if the choice is between blowing $8 billion more on search or buying abother aQuantive, they might as well subsidize a bunch of Surface devices, at least initially, now that they’re so far behind and desperately need some positive momentum.

  • http://mamikaze.com/ mamikaze

    I would because I am hooked on gadgets. MS has been working on this thing for 10 years, its a must on my list. I’m one of the lucky ones who can write it off, though. If it weren’t for that, I’d stick with just a Nexus 7.

  • GetSome

    “Microsoft needs to do something bold in order to regain its mojo in the tablet arena.” This implies that Microsoft had tablet mojo at some point in the past, which I find funny and erroneous.

  • guest

    @ $199, the post-PC era would be a PC-Surface era. For businesses and more importantly schools, it would be the ideal device. @ $199, there will be four of them under the Christmas Tree this year…

    Unfortunately, it seems inconceivable that anyone can include a 128 SSD in the device at that price point; and a 64 SSD is just too small. So, it seems like a false rumor than reality.

  • delay

    They will probably need to come in at some low price point like this. Look at their ad budget for windows phone and how many they actually sold. So its actually cheaper for them to sell it at a low price and just take a small direct hit and become a competitor. Their goal would be to displace android in this new market to become the #2 behind the iPad. Is what would interest me if the Windows RT is 199. Could I get a fully decked out windows 8 surface with keyboard, LTE chip, etc for $399? There might be a lot of users who would be drawn upwards into a more decked out surface where there might be a very small profit. At $199 they will at best breakeven and probably lose a bit on each at least initially. But the tablet market is that important to MS. Whether your partners care or not doesn’t really matter. We are in a new type of market where the software is no longer separate from the hardware. Apple and Google know this and MS is following their lead.

  • http://techmansworld.blogspot.com/ncr Michael Hazell

    If the surface did end up being $199, it would probably steal a lot of people away from the iPad.