According to an inside source, a session was held at Microsoft’s recent TechReady15 conference in which all the launch details were laid out. If things go according to the plan detailed then, the Surface for Windows RT tablet will be launching October 26th — no surprise there — at a compelling price of $199.
My initial thought is “bullshit”. This isn’t a 7-inch tablet that ASUS was able to retrofit for the Nexus 7, this is a brand-new 10-inch tablet. Oh and by the way, Google still doesn’t make any money selling that 7-inch tablet at $199. So for Microsoft to sell the Surface for $199, they would likely have to eat hundreds of dollars on each one sold.
Not only is that not Microsoft’s model, it’s the *exact opposite* of their model up until now. They have always made money by getting OEMs to pay licensing fees for their software — hence, huge margins. With the Surface, they are the OEM and as such, they’re getting no licensing fees. And, if this $199 price is true, they’d be selling a product at a huge loss, insuring a large negative margin.
It doesn’t just sound insane, it sounds impossible.
BUT then I remember that the future of Microsoft as a consumer company is at stake here. If they don’t make a bold move like this, the product could be dead in the water. See also: Windows Phone.
The Surface will also be coming out in a market with the $199 Kindle Fire, the $199 Nexus 7, and the $179 Nook. Oh, and presumably the $299 or $249 or $199(!) iPad mini. The Surface is set up to be more of a regular iPad competitor, but the fact is that consumers will look at the prices of these other tablets during the holiday buying season and could be tempted to go cheaper rather than bet on an unproven new product.
I’m still betting this is bullshit — with a small chance of Microsoft being batshit crazy enough to do this.