Is there any way claims of a $199 Microsoft Surface RT makes sense?

Summary:There are now two reports claiming Microsoft plans to price its Windows-on-ARM tablet for $199. Would subsidies, subscriptions and/or separately priced add-ons make this low-ball price plausible?

In the past week, we've heard two different claims that Microsoft is planning to price the ARM-based version of its Surface tablet at $199. (Claim one, claim two)

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Is there any way these rumors could possibly be true? Especially given the fact the Surface hardware is custom-made-to-order and likely to be available in small quantities out of the gate ? (And, based on the limited time the press and analysts had with the devices, of seemingly super-high quality for which one would expect to pay a premium price?)

Microsoft is not commenting on the $199 rumor. I can't get a "no comment." Just no response at all from the Windows team.

Update: A Windows spokesperson said the company had "no comment on rumors or speculation."

Here's what we know: When Microsoft unveiled its Surface PC/tablet devices earlier this summer, it offered very bare-bones pricing guidance: "Suggested retail pricing will be announced closer to availability and is expected to be competitive with a comparable ARM tablet or Intel Ultrabook-class PC. OEMs will have cost and feature parity on Windows 8 and Windows RT," according to Microsoft's press release.

On the Surface RT side of the house, most of us Microsoft watchers have assumed the "comparable ARM tablet" meant the iPad 2, which starts at $399.

What if Microsoft meant a different ARM tablet, like the Kindle Fire or the Nexus 7? The Fire is $199, as is the Nexus 7. I guess that's one way Microsoft could claim pricing comparability. However, the Softies have been playing up the business-readiness of the Surface RT, in spite of its inability to run existing Windows apps other than Office. They have been clear they don't think the Surface RT is a consumer and/or consumption-only device.

What if Microsoft meant the suggested retail price would include optional add-ons, such as one or both of the keyboards (touch and type) that are tailor-made for the Surface? (Right now we have no idea how much these keyboards will be and how Microsoft will package them up with the Surfaces.) In other words, maybe the "base" Surface RT unit is $199 and a keyboard adds another $100 or so. We also still technically do not know whether the previews of the four Office apps "included with" the Surface RT devices will cost anything. Microsoft officials still have not said on the record that these will be free.

What if Microsoft is planning to charge extra for the services that Surface RT users might want and need, such as Xbox Live, Xbox Music and Video, extra SkyDrive cloud storage and maybe even Skype? This could be a case where the base unit costs $199 and these additional services raise the price by a hundred dollars or more, making it more "comparable" to an iPad. Or, again, maybe the base price of a Surface RT unit is $199 if you agree to a two-year subscription contract for these services -- similar to the way Microsoft is pricing its $99 Xbox 360/Kinect bundle with a two-year Xbox Live subscription included?

Lots of what ifs... few real details.

Microsoft did announce earlier this week that there will be a handful of OEMs making Windows RT-based ARM devices which could be available starting this fall. Among those OEMs: Asus, Dell, Lenovo and Samsung .

It's interesting there was no mention by Microsoft this week of Toshiba, which had announced it was planning to deliver an ARM-based Windows RT device. Bloomberg BusinessWeek says Toshiba axed its plans as a result of a parts shortage. Industry analyst Patrick Moorhead with Moor Insights & Strategy  said he thinks it is more likely troublesome drivers may have been behind Toshiba's cancellation.

Topics: Tablets, Microsoft, Windows

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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