Rumor has it that Microsoft is planning to price its Windows RT-powered Surface tablet at a highly-competitive price point of $199. Unless Microsoft is willing to take a serious dive on each tablet sold, this sort of pricing is never going to be achieved.
There's been a great deal of mystery and speculation surrounding how Microsoft plans to price its Surface range of tablets. The information vacuum from Redmond has led to all sorts of rumors and speculation, from crazy pricing to this latest low-cost prediction.
This latest pricing prediction comes from an anonymous tipster via Engadget.
Microsoft has remained coy about Surface pricing. There was a statement from Microsoft early on saying that they were "expected to be competitive with a comparable ARM tablet or Intel ultrabook-class PC," but nothing more concrete.
But what exactly is competitive for an ARM tablet these days?
As much as I'd like to see a Windows RT-powered Surface tablet sell for $199, unless Microsoft is going to heavily subsidize the tablet, it's just not going to happen. While tablets such as the Kindle Fire and Nexus 7 have conditioned buyers to think of tablets -- but not the iPad -- as cheap, these are a different animal to Microsoft's Surface tablets.
The scant information we have about these tablets would suggest to me that the hardware is going to be significantly better than what Amazon or Google have packed into their tablets. Even with the best will in the world, I can't see Microsoft getting the bill or materials for this device to under $250. To be honest, I'll be surprised if the bill of materials comes in at under $300.
Microsoft could take the bold step and decide to subsidize the Surface with the idea of getting them into the hands of as many people as possible, but even this could be a massive gamble. Not only might the move further upset Microsoft's hardware partners, but any hopes the company may have of clawing back the subsidy hinges on whether it can encourage people to make good use of the Microsoft Store. If people don't use the Microsoft Store, Microsoft loses out.
That said, given that the Windows Store will be the only place that people will be able to get their hands on software for Windows RT devices, it is unlikely that people will be able to shun it completely.
Microsoft's also going to have competition. While the likes of Asus, Dell and Lenovo are all planning tablets, Toshiba has decided that the time isn't right because of "delayed components that would make a timely launch impossible". But come the general availability of Windows 8 in October, there's going to be no shortage of tablets to compete against Microsoft's Surface.
Maybe Microsoft is planning to throw some serious cash at the problem and offer people a high-quality tablet at a low price and hope for the best.