Microsoft Surface Making Ripples
More rumors emerge from the internet about Microsoft’s Surface tablet. At Microsoft’s TechReady15 conference, they stated all of the retail prices were laid out – the new tablet will become available on October 26th and start at $199. This comes as a pleasant surprise for consumers who were expecting something more in the $600 range. This has ruffled a lot of feathers as it also happens to be well below the likely cost to manufacture it. This mimics the approach seen with Microsoft’s gaming console, XBox, that is also sold below manufacturing costs. The difference is expected to be made up in software and media sales. Three partners (Acer, HP and Toshiba) have already dropped plans to produce competing tablets using Windows RT, the Windows 8 version built specifically for mobile ARM chips. Asus, Dell, Lenovo and Samsung are still on board.
Numerous complaints from manufacturers about the situation boil down to – not only would they would be in direct competition with Microsoft, but they would also still need to purchase licenses from Microsoft to produce the tablets. With a $199 price tag and no ability to recoup expenses with post-purchase software sales, competing in the environment Microsoft is creating becomes increasingly difficult.