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.
“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
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.