Is the Surface RT cheap, or is the iPad mini expensive?

Microsoft has changed the landscape of consumer tablets by adjusting the price of Surface RT. But they may also have made a rod for their own back...
Written by Matt Baxter-Reynolds, Contributor

For a few weeks now I've been meaning to write a piece around whether the iPad mini is too expensive compared to what are now acceptably good Android tablets.

Spoiler: the iPad mini is about twice the price of the Nexus 7, Samsung Galaxy Tab 3 7", and the Kindle Fire HD.

But Microsoft has rather spoilt that piece by reducing the price of Surface RT. Whereas this device was retailing in the US for $499, it's now going for the iPad-esque price of $349.

That might change things...


For this piece, I've taken a selection of tablets and looked at US retail prices. I've included the HP Slate 7, Nexus 7, Nexus 10, Samsung Galaxy Tab 3 7" and 10.1", Kindle Fire HD, iPad mini, iPad 2, iPad with Retina display, Surface RT and Surface Pro.

I've only included WiFi models. For Surface Pro, I've used the smallest 64GB option. For everything other than Surface RT, I've used a 16GB option. Surface RT's smallest size is 32GB -- however, because Windows takes up so much space on this device, a 32GB Surface RT is approximately equal storage-wise to an 16GB iPad or Android tablet.

I've ignored the wrinkle about the price of the Touch Cover keyboard/cover for Surface RT. You don't need a keyboard when using Surface RT properly. Plus, when you buy an iPad you need a good case for it, which will cost you around $50 whatever you do. Thus, I've ignored both the keyboard from Surface RT and a third-party case for the iPad.

This chart shows where Surface RT used to be positioned. Specifically, bang against the iPad with Retina display:

Old Surface RT pricing
The old/original Surface RT pricing.

This chart shows where Surface RT is now positioned. Specifically, right in the middle of the iPad mini and iPad pricing:

New Surface RT pricing
Microsoft's revised Surface RT pricing.

Both of those charts clearly show how the players we're looking at are working with price in the market. For $200 you can get a very decent Android tablet. HP seems to be massively low-balling the market, although the Slate 7 is a pretty good tablet other than the murky and disappointing screen.

Of course, if you look at Apple's pricing the full-sized iPad is clustered with the full-sized Android tablets. It's really only the iPad mini that looks comparatively expensive. Logically if you look at the pricing chart, the iPad mini is in the wrong place. It should have a small premium (20 percent, maybe?) over its 7" brethren, not the twice-the-price position it currently has.

Do more

At the price it is, Surface RT looks like a good deal. It's a little cheaper than the iPad 2 and its Android competition.

But what are you actually getting for your purchase of a Surface RT?

We know that the richest selection of apps on the iPad can be had on the iPad. Android tablet apps are improving, but remains in a second place position. The Windows Store app story is improving, but compared to both remains pretty poor.

But, I've spoken to a good number people who can make Surface RT work for them in terms of apps capability (often by using websites to get around problems with the apps).

Microsoft is currently trying to position Surface RT as "the tablet that runs Office". This is perfectly logical and sensible move, but to an extent it implies that you can balance out the entire Apple App Store with Office. Imagine a set of scales with every app for iOS on one side and Office on the other -- that's the picture that occurs to me.

You'd have to ask yourself if that works for you, because that's what you get at this point. Surface RT is a good price where it now is, and many people would regard being able to run Office on it as an advantage. Windows 8.1 promises to deliver improvements to Windows RT that makes it a more refined product. (One of the things that disappointed me about Surface RT was the general "v1.0" feeling of the thing.)

But, opportunity cost-wise, you'd be giving up the ability to run essentially every mobile app or mobile game there is.

And then?

Perhaps the more interesting question about the Surface RT pricing is this: "what next?"

iPads have tended to get a little bit cheaper as new products in the range are released. The assumption around the price reduction is that Microsoft is looking to clear inventory before a new set of Surface tablets are announced.

That might be logical, but consumers are never going to accept a price hike in the Surface RT range at this point. Microsoft has now very clearly said "the value provided by Surface RT is worth $349". They now cannot go back and say that a v2.0 product is $499.

I'd like to see Microsoft announce 8" Surface devices when they do refresh the range, and I'd be very surprised if they don't. 10" is too large for a tablet -- the smaller tablets are much, much more appropriate for domestic use.

That creates another problem, because where should an 8" Surface RT tablet be positioned in the market. Given that the iPad mini feels a little too expensive, the right price for that would seem to be around $250.

What do you think? Post a comment, or talk to me on Twitter: @mbrit.

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