Why did Microsoft price the new 64 GB Surface with Windows 8 Pro tablet at $899 without a keyboard? The obvious answer: It runs full Windows 8, unlike the Surface RT, and its specs are comparable to touch-screen Windows 8 Ultrabooks, many of which cost more than $1,000 — roughly the same as the Surface Pro after buying one of the device’s signature keyboard.

But Tami Reller, the Windows finance and marketing chief, would like to make another comparison, as well.

“Compare it to a typical Apple buyer, who is going to get a MacBook Air, plus an iPad,” she said. “That’s a more interesting comparison. … If you’ve got a buyer who needs both a computer and a tablet, Surface Pro is $1,000, vs. $1,000 plus $500 (for the MacBook Air and iPad). I think that’s the interesting comparison.”

That sums up Microsoft’s pitch for the Surface Pro as the company prepares to launch the new tablet later this week. The company is positioning the Surface Pro as the best of an Ultrabook and the best of a tablet, hoping to appeal to business and professional users who would otherwise end up buying those devices separately.

This situation sums up a major difference between Microsoft and Apple, whose CEO Tim Cook has poked fun at hybrid laptops and tablets, likening them to combining a toaster and refrigerator.

Here’s my exchange with Reller about the Surface Pro, part of a broader interview about Windows 8’s first 90 days.

Q: I look at the lineup of Windows 8 touch-screen Ultrabooks coming up, and then I think of the Surface Pro starting at $899 without the keyboard, and it seems expensive to me

Tami Reller

Reller: Think about a MacBook Air starting at $999 without touch. With Surface it’s $899, add your keyboard of choice, and you have touch. And the performance — you’ve got to spend time with the device. It has Core i5.

Q: In my research I found a 14″ HP ENVY touch-screen Ultrabook with Core i5 — 500 GB of storage, same RAM as Surface Pro, for $750. (It has since dropped to $699) That’s where it feels like the same thing, except it’s $150 less, with a keyboard. Are you facing a challenge on the pricing front with Surface Pro?

Reller: I don’t think so. You have to look at design, pen, touch performance. You look at it and you say, OK, I’m getting Ultrabook-class PC with the added benefit of a tablet package. It’s all I need. $899 plus a keyboard of my choice, I’m into the $1,000 category, and I have all I need, in a premium package.

Compare it to a typical Apple buyer, who is going to get a MacBook Air, plus an iPad. That’s a more interesting comparison. … If you’ve got a buyer who needs both a computer and a tablet, Surface Pro is $1,000, vs. $1,000 plus $500 (for the MacBook Air and iPad). I think that’s the interesting comparison.”

Q: That’s where it feels like the holiday period was a missed opportunity for you, because it feels like Microsoft figured something out that Apple didn’t with the touch-screen notebooks. But you didn’t capitalize on it with your partners by having enough of the product in the market last quarter. Is that fair?

Reller: Well, listen, it’s always easy to do Monday morning quarterbacking and want everything instantly. … This is what we intended with Windows 8 — one brilliant, predictable consistent touch experience across any interesting form factor. You may choose to have multiple devices, but you actually don’t have to. With the other ecosystems, you have to have multiple devices. Of course there’s the debate that you can get by with an iPad, but you are just getting by if you choose to just get by. More realistically, you’ve got a MacBook or a MacBook Air and an iPad.

Q: And here (with the Surface Pro)  you don’t need both?

Reller: You don’t! You so don’t.

Earlier: Q&A: Windows business chief calls Windows 8 launch a solid start, but just a start

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  • TomH

    Finally. Someone who understands that the Surface Pro is not just an iPad replacement. It’s an iPad+Macbook Air replacement.

    • http://www.thamno.com Bart B. Van Bockstaele

      Absolutely. The Surface Pro is the closest thing available to a “universal computer”, i.e. a computer good enough to serve as a desktop for most people, as well as serve as a laptop and a tablet.

      The Surface Pro is the first portable computer since the Fujitsu P2110 that has me so excited I can’t wait to have one.

      • http://www.facebook.com/chris.r.copeland Chris Copeland

        My opinion is that Lenovo already did that with the Yoga. I wanted a Surface but realized the kickstand had to many cons.

        • Nathan O

          Cons to the kickstand? I have an RT and I don’t get that at all

        • http://www.thamno.com Bart B. Van Bockstaele

          Perhaps. But the Lenovo has – in spite of the larger screen – a lower resolution and it also weighs almost twice as much as the Surface, which certainly limits its practicality when using it as a tablet.

    • http://eyejot.com/users/davidg davidgeller

      Yet, market conditions would seem to suggest that people didn’t want that and that the notion of a largely consumptive device (e.g. the iPad) was exactly what people were looking for. I love having a separate laptop and tablet. They work well separately. Together, not so much.

      • guest

        If people had both options to chose from and elected iPad, that would be a reasonable conclusion. But they didn’t. An iPad with more OS X capability would probably have sold just as well. Maybe even better. I think it’s unreasonable to think tablets won’t become more functional and dual purpose. That doesn’t mean MS will win. Frankly, I think Apple and Google are now much better positioned to just grow their offerings up.

        • http://eyejot.com/users/davidg davidgeller

          They had this option for years with Microsoft’s earlier versions of tablet computing. They were once the leader. Granted, it was a small market before iPad. Could you have a successful tablet platform that melds everything a desktop OS can offer with a UI that’s ideally suited for content consumption? I have no doubt that it’s possible. But, so far, no one company seems capable of doing it. Not Microsoft. Not Apple. And, I think Apple knows this and, smartly, positioned iPad to do things differently and simpler than what OS X was positioned to accomplish.

          • guest

            No, they didn’t. They had a desktop OS designed for Win32 with touch bolted on as an afterthought and on hardware that was mostly suited to industrial applications. Also, the market has changed dramatically since then with cloud-based solutions being more available and important and better adoption of high speed connectivity. So comparing results from then to now isn’t overly useful imo. iOS is OS X, a fact that Apple used to tout. They made it simpler because that’s what was required for the devices they were shipping. And yes, that certainly was the right decision for the first wave of iPad-like tablets. But again, I’d be surprised if over time tablets don’t become much more capable and dare I say PC-like.

          • dalestrauss

            Mr. Gates did have the vision, even years before Mr. Jobs, of a go everywhere tablet, but the hardware was just not there through the 200’s. Look how Apple even started with tablet design first then switched to the iPhone to perfect touch. So the Windows XP – Windows 7 era WAS NOT a tablet era. Unlike Apple, Microsoft has moved top down, pushing a full desktop OS into a tablet body. Apple’s solution was to upscale a more limited phone OS to the tablet. Who’s to say which is right, but until this Saturday, there has NOT been a functional desktop OS/tablet experience.

  • Guest

    The problem with Microsoft is they come up with some technical comparison and try to TELL people why their offering is better. Its very patronizing. Why do you think people can’t figure such stuff out on their own? I’m sure Zune compared favorably with the ipod and had a few more whistles- doesn’t matter, consumers know what they want, if they like it – they buy it. All reasoning/logic/analysis comes post that.

    • Jeremy

      Aaaaand, you nailed it.

    • vbscript2

      Yeah, really. I mean, consumers don’t want to be bothered with facts, right? I’d much rather buy something because it looks cool rather than because it’s actually useful.

    • guest

      Right. Because Apple got where it has purely through the strength of its products. Carpet bombing marketing, which included some of the most outrageous claims any vendor has ever used, didn’t factor into it at all.
      MS’s problem, beyond the product shortcomings, isn’t that it tells its story too much but that in most cases it fails to tell it well at all.

    • http://twitter.com/Scruffy_lookin Nick Heazell

      You mean patronizing like telling me I can’t look at any websites that have flash because of security?

  • http://www.christopherbudd.com Christopher Budd

    It’s certainly an interesting point and positioning.

    I think the challenge though is that you’ve got a conceptual hill to climb here. You’re essentially introducing a whole new class of device here, one that subsumes two classes that are separate in most people’s minds.

    To succeed, you’ve got to get people to understand how it does what BOTH classes do very well.

    In other words, I think the effective sale here is task-based and solutions-based and showing how you use this to accomplish things that both can well.

  • chrispauly

    If Microsoft really wants to emphasize and push the fact that the Surface Pro can be used as a laptop, they should include the keyboard in the $899 price.

    I was excited for the Surface Pro until I heard the price. But then a press release said the price included a touch keyboard and I was stoked again. But then the press release was re-released to exclude that and I was put off again.

    And with the other revelation that 2/3 of your disk space will be used up by Microsoft on delivery (on the 64GB model), that really soured me to the product. Microsoft couldn’t ship a USB drive or a microSD that had the recovery OS data on it?

    I won’t warm up to that price point until Microsoft delivers a complete product for that price.

    • vbscript2

      No one with those specs delivers what you want for that price. They can barely build it for that. The processor alone is $225. A 1920×1080 touch screen and the SSD’s aren’t cheap, either.

      • chrispauly

        What I meant was that in whatever base price the Surface Pro is offered for, a keyboard should be automatically included. How many people buy a laptop and don’t use the keyboard? I guess you could attach a USB keyboard to this or a bluetooth one.

        I do like Luke’s idea of bundling/offering a discounted keyboard. That would impact my purchase decision more.

        I hemmed and hawed about the Nokia Lumia 920, but when Nokia/AT&T threw in a free wireless charger… I bit. That was an accessory I wanted with my phone immediately, and so the bundle concept sold me.

    • Luke

      I do think keyboard should get included but at launch date to already discount keyboard for free is unlikely.

      $19 gets you though 32GB micro SDXC. So disk space I feel is bit overblown especially that you can free up another 12GB+ by deleting the recovery partition and remove office (if you want more space instead of backup+office).

  • Sam

    The post-PC era is not just a tablet, it is a personal computer that can be your desktop PC if you want it to be, your laptop or your tablet. Microsoft finally figured it out, it’s PC 2.0. Surface Pro is the holy grail of personal computing, the one device to rule them all! (SPOILER ALERT: expect accessories for docking and new keyboards with built-in batterypacks)

    • Houshasen

      If they really come up with battery packed keyboard, and docking station for larger monitor at home, I think it makes huge sales point. And personally really like to see it. But given that MS has not mentioned any thing about such options, I highly doubt it will happen at least with the first Gen Surface Pro.

      • vbscript2

        You can already connect it to a larger monitor at home. It has a DisplayPort output. You can already make your own docking station for it with a $5 USB hub for the mouse/keyboard/printer/etc. and the DisplayPort. Granted, it’s two plugs instead of one, though I’d rather plug two things in and save the $50-$100 that most companies seem to like charging for docking stations. Agreed that the keyboard with battery pack would be nice, though.

    • dalestrauss

      Care to share some more of that insider information – before or after Haswell? Am I about to waste $119 on a keyboard/cover?

    • http://www.facebook.com/chris.r.copeland Chris Copeland

      I’ll keep my Yoga. To me it’s better just based on ergonomics. However if I had need of a stylus then the Surface would be the best bet.

  • Nathan Comps

    The funny thing is .. for that price. Id brather just buy an ultrabook/laptop with touchscreen functionality!
    Asus VivoBook S400CA-UH51 – MSRP $699 … less if you have coupons or when it is on sale

    • vbscript2

      It essentially IS a small ultrabook with a touch screen. I mean, come on. It has the same processor, graphics, and RAM as the ultrabook you mentioned. The VivoBook should cost less than the Surface Pro. It’s specs aren’t as good (24 GB SSD vs 64 or 128 GB in the Surface, 1366×768 display vs. 1920×1080, 0.3 MP webcam vs. 2x 1.2 MP cameras, etc. and it’s larger. While the size doesn’t make as much difference for some people, it does for others. The Surface Pro is a lot easier to carry around than a 14″ ultrabook (and is quite a bit lighter.)

  • http://www.mainstreetchatham.com/ JimmyFal

    The Surface RT has it nailed formfactor wise. Even though I wish it had a rigid hinge that would also fold back, it is far more attractive than an ultrabook format that will not fold back on the hinge, this matters for the tablet experience big time.

    If Microsoft can somehow pull 6 hours of battery life or more out of it’s hat, I might even go get one. But for myself that 8-9 hours on the Surface RT with MS Office is a game changer for my usage. I don’t think they will deliver on battery life. That’s really too bad. Please surprise me MS.

  • Dan Dear

    Does anybody have any nugget of information on when this product could be released in the UK? We’ve heard nothing – the website just states coming soon. We’ve yet to receive any price announcement too. It’s frustrating.

  • teralgoe

    Apple worried about surface pro.

    Seems that the car that flies and float are doing well,
    apple that historically have been indifferent to competitors products, for
    first time in the 3 years of iPad life have reacted to the launch of a tablet,
    the surface pro. The preemptive strike is aimed to the only “weakness” of the
    surface, storage space.

    The reaction is motived, by the fact that the surface pro
    can tear down the gaining in enterprise market that the iPad have achieved via
    the BYOD. The press release of apple confirm this.

    “IPad continues to have a significant impact on business with virtually all
    of the Fortune 500 and over 85 percent of the Global 500 currently deploying or
    testing iPad. Companies regularly utilizing large amounts of data such as 3D
    CAD files, X-rays, film edits, music tracks, project blueprints, training
    videos and service manuals all benefit from having a greater choice of storage
    options for iPad. The over 10 million iWork users, and customers who rely on
    other incredible apps like Global Apptitude for analyzing team film and
    creating digital playbooks, Auria for an incredible 48 track recording system,
    or AutoCAD for drafting architectural and engineering drawings, also benefit
    greatly from having the choice of an iPad with more storage capacity.”

    This is a good indicator that Microsoft have nailed it this time,
    despite the criticism of the pundits. Users are loving windows 8, that “step
    learning curve” is pure BS, adoption is only constrained by OEM’s failing to
    deliver decent and affordable touch enabled devices.

    The apple reaction is a clear indicator that they have
    concerns about the success that surface pro can have in the enterprise and
    power user market, so his defensive strategy is to try to fool customers
    pairing the iPad with the surface pro in specs and price, the wording in an
    excerpt of John Gruber blog suggest that.

    “$799 for the Wi-Fi model, $929 for cellular. Timing-wise, note that
    Microsoft’s Surface Pro, which goes on sale in a week, starts at $899
    for 64 GB model. That’s not an apples-to-apples comparison,
    tech-spec-wise, but I think half the problem Microsoft faces is that most
    people don’t understand the difference between Surface and Surface Pro.”

    The flaw with the Apple strategy, is that the target market of
    surface pro, is more tech savvy than average user, and can differentiate the
    versions of windows and decipher all the computer slang. Although for some users
    storage space will be an issue, the decisive factor to purchase a surface pro
    is not storage space, but the fact that you have all the computing power of an
    i5 at your fingertips, literally. All of this in a tablet form and about two
    and a half pounds. Why you settle with an abbreviated cad app when you could
    have the full version and create a full drawing instead merely read one? Also
    the stylus with palm rejection is really a big plus for graphic designers.

    Apple have serious reasons to be worrisome, when you do the
    tally, both weight and price, between surface pro and the apple counterpart,
    apple are hapless vulnerable.

    With surface you spend $1,197 and carry about 4 pounds in 5 items
    between the tablet, accessories and charger. With apple, to get the same
    functionality you have to spend $1,993 and carry 7.5 pounds in 9 items. For a
    heavy traveler saving almost half in money and weight is more important than
    the apparent lack of storage space.

    Apple and Microsoft stared and apple blink first

    • http://twitter.com/Scruffy_lookin Nick Heazell

      It’s strange though. If Apple is worried about the Surface Pro (and I think it need not be) it’s decision to counter that based on the perceived weakness of storage misses the mark hugely. For one, people who want storage on a Pro, want it to add more applications and have full programs running.
      With the Ipads you could make it 900 gigs and you’re not putting Adobe Illustrator or Autocad etc on there. So they’re combating a problem with the wrong weapon, and two it’s an expensive weapon in terms of an upgrade at that.

      • Arlington Albertson

        Just to play devils advocate, you can actually run Autocad on an iPad.

        • teralgoe

          You can run a viewer, with limited editing tools, but you cannot create a drawing from scratch, actually I cannot find a good ARM (ipad or android) app to create vector based drawings or graphics, except for adobe ideas, but still you need a PC based illustrator to refine and add all the bell and whistles.

      • teralgoe

        I think that they underestimate the potential of the surface pro, and the only weapon that they have at hand is the 128 gb ipad.

        Let’s see how much time takes to apple to swallow his pride and reveal to the world his innovative and revolutionary fridge and toast.

  • haosmark

    You know, when you have to keep justifying what makes your product better, it almost always means you have a failed product. Sorry guys, I like MS, I think Gates is a great and smart guy who, unlike Jobs/Apple, does something good with the money MS made him, but realistically surface is too expensive for regular consumer.

    The only reason I’m getting it is that I can do some coding in my bed right before I go to sleep, the wacom pen for light photoshop design and it looks like it will be great to take notes in college, well and $1000 doesn’t really break my bank.

    People keep saying that you can get ultrabooks that are better for this much money, but the reality is, you can’t. I looked through alternatives and they are either a tiny bit better, but far more expensive, or worse and just a little cheaper. One worthy UB I found was samsung series 7 ultra and I would get it over surface pro, but there are no news on it’s release, so I’ll stick with the pro for now.

    • vbscript2

      Is it really too expensive for a regular consumer when it doubles as both their PC and their tablet? I suppose it’s unnecessary if all you want to do is use facebook, but there are a lot of us who need more than that out of a computer (and, judging from the rest of your post, that includes you, too.) The people for whom this is supposedly too expensive are currently buying MacBooks and iPads. I’d bet they can afford the Surface Pro.

  • pawelcss

    unless it is not easily understandable, recognizable for clients to see difference it is overpriced.

  • Nathan O

    An Apple toaster fridge?! when does that come out?

  • vbscript2

    ok, the HP comparison is hardly fair. You’re comparing an HDD to an SSD, a 1366×768 display to a 1920×1080 display, and a 2 lb computer to a 4.7 lb computer. Also, it’s more difficult to pack those components into the 10″ form factor of the Surface Pro than into the 14″ form factor of the HP, especially since the surface pro is just over 1/2 of the thickness of the HP ENVY.

  • Marc

    And don’t forget: It is also a watch, and a music player, and a weather station, and an ebook reader, and a pocket lamp, and a calculator, and a tray, and a table tennis racket.

  • TheDude

    Do you guys know anyone that doesn’t work at MS that loves loves loves their Surface? I know a few disillusioned folks, and some folks that struggle to use it. But I don’t know many outright fans. Apart from the folks that work at MS.

    I don’t have one myself, but it’s really strange: my impression is that it’s looks really nice. If I were in the market, I’d look at it seriously. But no one seems to love it. Compare that to Apple products, where there are lots of rabid fans.

    Is this just a skewed sample? First mover advantage? Is the product really that flawed (I have a hard time believing that).

    • Arlington Albertson

      You’re comparing the Surface RT, not the Surface Pro which is what this article is based on. The RT is arguably a highly contested “mistake”. It’s a great concept, but in practice has not turned out to be ready for prime time. The Pro however is a full on Windows machine that everyone is used to. Even though it’s more, it will definitely stand a better chance of becoming a “favorite” product among non-microsofties. At least that’s my thoughts/hopes. :)

    • teralgoe

      I don’t work for Microsoft, own a surface rt and LOVE it,

  • J Moral

    For the the people that do not need an i5 Intel Chip but still want a Windows 8 tablet New From Dell-$499 with Windows 8 Pro- $99 Extra for Docking Station

    Latitude 10 Windows 8 Pro Tablet

  • http://twitter.com/cwm9 cwm9

    The problem is that it isn’t quite an iPad replacement. It needs cellular and GPS and they will have nailed it. We need dropbox on the go and the ability to navigate. Also, GPS needs to behave like location services in iPad — none of this COM port emulation garbage, it should be a PNP device, like a mouse.

  • SMH Microsoft

    64 GB is just not big enough to support a full PC 250GB-500GB minimum that runs all games and programs a full pc you can take anywhere is what they need to acheive at a price it around the price of a nice laptop

  • holly plyler

    Honestly with the pen that comes with the pro you have to combine another piece of hardware to the list. a high quality wacom tablet. For a 13 inch screen cintiq tablet (the hardware closest to the surface) you’d have to add another 1000 dollars. So in total you’d have to buy a tablet a computer and a cintiq to get the same value.

    This wouldn’t be a consideration to all users, but as I am a digital graphics artist who has used the ipad and the surface to draw I can tell you the surface’s pen’s presure sensitivity was the #1 reason I bought the pro vs the rt.
    It is a great artist’s companion.

  • wohl

    i get a free iPad courtesy of university my macbook air with identical specs costs £300 pounds less (or did a year ago) so I’m all good.

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