Microsoft's Surface challenge: Proving it's a premium product worth a premium price

Microsoft's Surface challenge: Proving it's a premium product worth a premium price

Summary: I think there's a market for premium, differentiated PC/tablet hybrids that aren't trying to compete primarily on price. I'm hoping Microsoft's Surface proves this category exists.

TOPICS: Tablets, PCs, Windows

I think those who are predicting Microsoft's coming Surface PC/tablet hybrids will fail if they don't beat the iPad on price are wrong. I think the Microsoft Surface will fail if Microsoft fails to prove the devices are premium products worth premium prices.


We still don't know exactly how Microsoft intends to price the Surface, though CEO Steve Ballmer telling The Seattle Times he considered the "sweet spot" for the PC market to be between $300 and $800. We know Microsoft execs are continuing to insist tablets are PCs. So I guess that means Ballmer believes PC/tablet hybrids like the Surface -- or "pablets," as no one but me calls these things -- also should come in between $300 and $800. Keyboards like the Touch and Type keyboard covers for the Surface are probably extra, I'd think.

Ballmer also made it clear to The Seattle Times he isn't trying to be the price leader with Surface devices. I have to say I'm relieved to hear it. There will likely be more than enough look-alike, same-old Windows RT and Windows 8 tablets competing to be the low-cost leader/loser, I'd bet. 

There also seem to be some PC and tablet makers who aren't thinking about competing on cost --  but also don't seem to have anything much to warrant premium pricing. Microsoft's original guidance was that it would be pricing Surfaces in line with competitive ARM-based tablets and Intel-based ultrabooks.

ZDNet's Larry Dignan got his hands on a slide showing Asus' holiday line-up with its RT tablet coming in at $599 (plus another $199 for keyboard/dock), and its hybrid tab -- similar to the Intel-based Surface Pro -- coming in at $799 (plus another $199 for keyboard/dock).

Paul Spain, host of the NZ Tech Podcast, got Acer to share its planned pricing for its Iconia W510 Windows 8 tablet -- its Surface Pro alternative. It will start at NZ$999 incl tax (NZ$868+tax). "A direct conversion would make this US$712 excluding tax (as the norm for US pricing)," Spain noted. (Spain has more pricing straight from Acer for other Windows 8 hardware, as well.)

I'm not sure if any of the other PC/tablet makers will talk pricing at the upcoming September 27 Intel Clover Trail showcase, but both Acer and Asus -- along with  Dell, HP, Lenovo, Samsung and ZTE -- are all expected to show off their new devices at the San Francisco event.

We're just about a month away from the day the Surface RT -- the version that runs on an ARM chip but that won't run existing third-party Windows software -- will debut. None of us in the tech press have had any real hands-on time with production versions of the device so far. So we don't really know if the hinges, the touch pads, the keyboards, the casing and all the other components Microsoft execs touted back in June are really as amazing as they looked in the orchestrated demo. None of us has had any real hands-on time with the operating system powering these machines, Windows RT, either.

If the Surface RT works, looks and feels great, I'd be willing to pay more than an iPad for one. I know there are others like me who are tired of having lots of Windows hardware from which to choose -- but almost nothing worth splurging on.

Here's hoping the Surface team -- which seems to have as its charter "focusing on building devices and peripherals that fully express the Windows vision" -- comes out of the quality gates with a boom.


Topics: Tablets, PCs, Windows


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • Prices, especially leaked ones, don't mean much until we see build-quality.

    I think Surface RT will have to come with Apple-level build quality regardless of it's price point, but especially if it's more expensive. Microsoft has some wiggle-rooom with it's target market. The enterprise might be willing to pay for Surface than comparable devices if it's compatibility and manageability are as good as claimed. The danger is Microsoft's lack of experience with this kind of hardware. Can they oversee Pegatron to ensure high quality. A "Red Ring of Death" type scenario literally kills the Surface brand.
    • Why only aim for Apple level QA?

      "I think Surface RT will have to come with Apple-level build quality regardless of it's price point"

      I would hope that MS aims higher. After all, Apple products have all come with a string of -gate failures.
      • One has to learn how to walk before they can run, Todd.

        Let's see if MS can match the build quality of Apple first before we talk about surpassing Apple's build quality and excellent consumer satisfaction ratings first.

        There is no reason their Chinese partners can't produce a product as good as the one's Apple's Chinese partners can. Grin.
        • I expect better than Apple

          That's why I'm interested in buying a Microsoft tablet and a Nokia smartphone.
          • Nokia's build quality

            I have been Nokia phone user for well over a decade. I have always loved their phones because of the simplicity, ease of use, good reception and voice quality. But hardware has always been crap. Not as crappy as the Samsungs etc, but still... can't compare *at all* with the iPhone.

            Recent Nokia phones have been "better". Still, even the flagship models can't rival the iPhone in build quality. It's still plastic :)

            Do yourself a favour. Don't put so much hope on Nokia phones build quality. Listen to the victims :)
          • I have listened to the "victims"


            Nokia hardware is not "crap".

            And so what if it is plastic? The cockpit of the F22 Raptor is plastic. The iPhone is made of aluminum, the same stuff that is so fragile, even babies have the strength to crumple it.

            "can't compare *at all* with the iPhone"

            You are right, there were so many -gate hardware issues with the iPhone, the Nokia can't compare *at all*.
          • Never argue with the radio

            I should learn. I always forget that your script and instructions prohibit you from admitting obvious things.

            But, let me just remind you, that I own both brands. Both are right here in front of me (the N8 Nokia) and no, they can't be compared on build quality.
            Even a bling person (even more so blind person because they are more sensitive) could tell you that.

            What Nokia phone and iPhone do you compare? Yourself?
          • What Apple Build Quality?

            Drop an iPhone and it breaks the screen.
            Use an iTouch for a couple weeks and the back is cluttered with scratches.
            What Apple build quality are you talking about?
            Hammad Usmani
          • with regards to apple

            I think most people confuse build FEEL and build quality. apple build quality is not anywhere higher than other major brands. their build feel, on the other hand, is very high. regardless of how well built apple products are in reality, apple has an amazing ability to make their products feel like they are extremely high quality.
          • N8? That's not exactly flagship these days....

            My wife uses the Nokia Lumia 800, which has the same build as the N9 and I'll be honest. The hardware is alot more solid than my iPhone 4. The N8 and prior devices would definitely not qualify in the same league, but get your hands on the Lumia and any honest unbiased man would call them comparable at the very least.
            Victor Chin
          • Microsoft new politics, sell it as 'premium'

            They are two merchants, one says to the other...
            I have a horse that is understands three languages​​, it's just all day pulling the plow, while I'm lying in the shade of an olive tree...went getting to home,it brings me the slippers, the newspaper, the beer ...and the next day it wake me up, ready to go to work ...Truly a gem ... Too bad I have to sell it, because my wife is sick and we need money ...
            - The other tells impressed ....
            - If the horse is so good, I'll buy it .... after a short haggling the horse changes of owner ...

            After two weeks, the buyer goes to the seller, pulling the horse and totally irritated says ...

            - You're a bad person ...badly conned me ... This hack has not seen a plow in his life, this lame, one-eyed, only eats and is useless ...can not even whinny

            the other replies ...
            - If you keep talking like that about your horse, you never will sell it...
            Marco nn
          • Fantastic story about Apple advertising

            Thanks for sharing, you described Apple marketing perfectly.
          • don't poo hoo advertising, Todd

            the best product in the world is only good if people actually want to use it
      • At this point Microsoft should aim for a shipping product.

        Let's not forget the RRoD debacle cost MS $1.15 billion, on top of all the money EDD burned through developing the damn thing. So, Apple-level build-quality is pretty high hurdle for Microsoft. If they can surpass it, good for them. Of course, for all intents and purposes we're still talking about vaporware.
        • iPhone 5 is vaporware

          I can't walk into a store and walk out with an iPhone 5.
          • You can't walk out of a store with a Surface or a Lumia 920 either.

            But I'll bet you can do so with an iPhone 5 a lot sooner than you can with that Surface or 920.
          • Walk in?

            The reason you can't walk into a store and walk out with an iPhone 5 is simply that you have wasted your time blogging rather than invested it standing in line...
          • Wha??

            You might wanna look up the definition for 'vaporware'. Vaporware doesn't come with pre-orders and a delivery date.

            "You keep using that word. I do not think it means what you think it means" - Inigo Montoya
          • Vaporware is not a well defined word

            It is a slur meant to describe a product that will probably never ship or has been delayed for extended periods of time (months or years) so many times that any announced release time frame is regarded with little confidence. Neither of these hold for the Surface or the Lumia. They are announced products, demonstrated in front of a live audience with live recordings that were released over the Internet, never been delayed and so really do not fit the classic definition of vaporware. Courier was vaporware. Duke Nukem Forever was vaporware (right up until the time it wasn't). Apple's iTV is vaporware. Lumia 920 and Surface simply don't fit that defintion well.

            In this case, many are using it to describe a product that people can't hold and try yet, a definition that easily fits the iPhone. We saw an iPhone demonstrated to us, we've seen a Surface demonstrated to us, we've seen a Lumia 920 demonstrated to us. For today, all 3 are vaporware if we use that definition.

            Tomorrow, that might change. In early November, it might change again. I wonder if all those calling the Surface and Lumia 920 "vaporware" are going to come back on release day and say "oops, sorry about that"? Doubtful. There is no intellectual honesty amongst the Apple fanbois.
          • vaporware is how microsoft killed OS2

            Microsoft required hardware manufacturers to write device drivers for NT under the threat that they would not be included if they missed a deadline. That deadline was designed to have the manufacturers stop writing for OS2 for long enough to mess up IBM'S release of SP1.
            Of course the overrated Gersrner, who screwed IBM, released PC's that were incompatible with IBM's on operating system.