In what could be another massively game-changing move from Redmond, a rumor suggests that Microsoft could price the Microsoft Surface For Windows RT at just $199.
Microsoft will also likely take a loss upfront with the Microsoft Surface For Windows RT if it will be sold at just $199 during its release.
The rumor comes from Engadget which ran a report citing an anonymous source saying that Microsoft plans to sell its lower-end Microsoft Surface tablet at that price.
When Microsoft shocked the whole tech community back in June with the announcement of the Surface tablets, the company left out one important detail from all the information it revealed: How much will these tablets cost?
This rumor, if it really is from a source inside Microsoft, is the first indication as to how much the Surface duo will cost for consumers.
A lot of guess work from industry observers since announcement of the tablets pegged the price of the Microsoft Surface for Windows RT at $500 and above.
The Microsoft Surface for Windows 8 Pro is said to be priced even higher.
Industry watchers have had a consensus for some time that Microsoft needs to price the Surface tablets just right if it is to succeed in grabbing a substantial amount of market share from the industry-leading Apple iPad as well as competitive Android offerings like the Kindle Fire, Nexus 7 and Samsung’s Galaxy line of tablets.
If it sells for $199, the Microsoft Surface For Windows RT will be Microsoft’s bid in the same strategy as Google with the Asus-built Nexus 7 tablet and Amazon with the Kindle Fire tablet.
The Kindle Fire is priced at $199 and the Nexus 7, while initially priced at $249, is offered exclusively on the Google Play store for the same price. This Nexus 7, however, will only have 8GB in internal storage space.
These tablets make a loss up front for the two internet companies but are meant to make money for them in the long run as device owners view ads and purchase services and applications for their tablets.
The Kindle Fire is estimated to cost Amazon a loss of $2.70 to about $10 for every Kindle Fire sold. Amazon presumably makes up for this with purchases through its online storefronts made by users of the tablet.
Microsoft could be gunning for the same approach if it sells the Microsoft Surface for Windows RT for a price of $199. Microsoft has done this approach before with the Xbox, making up for upfront money lost on game purchases through its store.
For that money, you’ll be getting a tablet that is equipped with a Nvidia Tegra-based processor and a 10.6-inch ClearType HD (720p) capacitive touch panel in a svelte chassis.
No specific details have been revealed yet as to what exact processor this will be and how much RAM the tablet will get.
Meanwhile, the Microsoft Surface for Windows RT is 9.3 millimeters thin and weighs 676 grams. That chassis will have a 31.5Wh battery tucked in it along with ports for MicroSD, USB 2.0, and MicroHD Video.
The tablet will also have 2×2 MIMO Wi-Fi antennas rear- and front-facing cameras and the option of having 32GB or 64GB in onboard storage expandable via that MicroSD slot.
The most notable feature of this ARM processor architecture-based tablet is that it will have Microsoft Office (Word, PowerPoint, Excel) preinstalled straight out of the box.
This will be one of the major selling points of the Microsoft Surface for Windows RT.
Microsoft realizes that it is jeopardizing its relationships with original equipment manufacturers with its launch of the Surface tablets.
OEMs have traditionally been given inside information by Microsoft as to its plans regarding hardware products it is developing.
However, OEM executives have spoken out in the past that Microsoft did not tell them about Surface.
OEM’s felt a “sense of betrayal,” an anonymous industry source who Reuters talked to told the news organization.
Furthermore, an unnamed Acer executive was also quoted as saying that “No senior executives heard about the news last week [the launch of Microsoft Surface].” He said that they were “quite surprised” when Microsoft unveiled the two surface tablets back in June.
“This has always been a point of contention between OEMs and Microsoft — Microsoft getting into the hardware space,” another OEM insider told the news organization.
Microsoft is now a direct competitor with its OEMs, a thing Google has done when it acquired Motorola Mobility.
Microsoft, in an annual report to the U.S. Securities and Exchange Commission admitted that they will strain relationships with OEMS with Surface. The company wrote in its FORM 10-K filing that:
“We derive substantial revenue from licenses of Windows operating systems on personal computers. The proliferation of alternative devices and form factors, in particular mobile devices such as smartphones and tablet computers, creates challenges from competing software platforms. These devices compete on multiple bases including price and the perceived utility of the device and its platform. Users may increasingly turn to these devices to perform functions that would have been performed by personal computers in the past. Even if many users view these devices as complementary to a personal computer, the prevalence of these devices may make it more difficult to attract applications developers to our platforms. In addition, our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform.” [Emphasis ours]
Microsoft is also already recruiting a formidable team to build the next Microsoft Surface for Windows RT and Microsoft Surface for Windows 8 Pro.
Images from Microsoft