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Ballmer: Don't expect Surface to be the "cheap option"

Posted: , by Alan F.

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Ballmer: Don't expect Surface to be the
It's hard to believe that nearly three months have passed since Microsoft introduced the Surface tablet. During those 90 days, we learned nothing more about the two different variants of the product, including pricing. From the consumer's standpoint, it is always good to know the price of a device that you plan on buying as early as possible. This way, you can start panning where the money is coming from to buy it, (Let's see, if I sell my old tablet and my Microsoft KIN ONE, I might have enough, or perhaps I should just sell that Monet hanging on the wall for money to buy the device) so you can be prepared.
"I think most people would tell you that the iPad is not a superexpensive device. ... (When) people offer cheaper, they do less. They look less good, they're chintzier, they're cheaper.
If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle (Kindle Fire, $199) to do their homework? The answer is no; you never would. It's just not a good enough product. It doesn't mean you might not read a book on it..."-Steve Ballmer, CEO, Microsoft

Microsoft CEO Steve Ballmer sat down with the Seattle Times the other day to discuss various things, including the upcoming Microsoft Surface tablets, and said that the Surface tablet has the elements of success despite the fact that the device has yet to go on sale. Ballmer gave away Microsoft's marketing strategy by saying that the Surface tablet can compete with the Apple iPad on features. That obviously means that the Surface will nor, as the CEO says, be "the cheap option."

Microsoft's Surface tablet will not be the cheap option says CEO Ballmer

Microsoft's Surface tablet will not be the cheap option says CEO Ballmer

We get the idea from the interview that Ballmer hates selling at the low-end of any market. Low-end products are chintzier, look cheap and do less, according to the executive. As an example, he mentioned that the 7 inch Amazon Kindle Fire  is not a good enough product to do homework on, but it is good enough for reading a book. From the CEO's comments, we would expect Microsoft to be more concerned with the bottom line than the top line. In other words, don't expect the Surface tablets to be low priced in order to obtain market share. The aim here is to grab a substantial profit margin, going against the usual "defend your market share at all costs mentality. Remember, there will be two models of the Surface tablet one running on Windows 8 using an Intel Ivy Bridge chip produced using the 22nm process and the other powered by an ARM based processor. The pair is expected to launch on October 26th.

source: SeattleTimes, via Gizmodo

59 Comments
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posted on 16 Sep 2012, 12:14 24

1. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)


"If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle (Kindle Fire, $199) to do their homework? The answer is no; you never would. It's just not a good enough product. It doesn't mean you might not read a book on it.."

no we wouldnt but we would indeed use a nexus 7 tablet to do our homework!

dude apple is over priced and always has been..............go to ebay and see that their FIRST generation ipad is still 400 plus dollars..........THEIR FIRST GEN! are you kiddin me?

posted on 16 Sep 2012, 12:17 14

3. PapaSmurf (Posts: 7407; Member since: 14 May 2012)


I don't think there's something that the Nexus 7 can't do. Its a jack of all trades for $199. What a steal.

posted on 16 Sep 2012, 22:54 3

55. cepcamba (Posts: 717; Member since: 27 Feb 2012)


There's something the Nexus 7 can't do. The Nexus 7 can never ever make a crap out of itself.

posted on 16 Sep 2012, 12:51 7

15. Gawain (Posts: 342; Member since: 15 Apr 2010)


The MS Office environment is a real winner for students though. With OneNote, I can prepare anything, and convert/send to anything/anyone. It's also mature and does not have any of the buginess that still plagues the Android ecosystem. Of course I'm biased in my view, but my Fujitsu Lifebook with Wacom Penabled is absolutely stellar in the classroom or meeting environment. I'm really looking forward to seeing the seams that are gapped with Windows Phone 8, Wndows 8, and the MS Office experience. ;-)

posted on 16 Sep 2012, 13:28 4

26. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)


"It's also mature and does not have any of the buginess that still plagues the Android ecosystem."

http://www.youtube.com/watch?v=bNkwVa-jp_g&feature =related

lets you know how far android has come enjoy :)

posted on 16 Sep 2012, 17:02

45. meowcenary (Posts: 187; Member since: 13 Apr 2012)


I love Onenote, and agree it is a very good productivity suite.

posted on 16 Sep 2012, 17:00

44. meowcenary (Posts: 187; Member since: 13 Apr 2012)


I would not be using a tablet to do my homework. I still prefer a desktop, laptop, notebook/subnotebook, and a netbook. As for Steve Balmer, he needs to go. I have seen lots of good young execs, leave because of him. His moves are not doing MS any favors, with him on the helm.

The killing point for the surface would be the price tag. The damn thing is a multi-media device versus a productivity device. Selling it high would not help them, nor cause people to flock to said device.

posted on 17 Sep 2012, 06:14 1

57. Jimstar (Posts: 259; Member since: 24 Oct 2011)


what exactly is it the Fire lacks that the Nexus has that enables it to be better at that sort of thing?

People keep saying the Fire won't be as good for this or that, but I honestly can't tell what it's lacking in order to be a sufficient productivity tool.
I mean hell when it comes to homework, if I can access google drive through the browser then I can type out a word document. Hell I could even be stupid and download an Office clone from the amazon app store(just checked it on my phone, found 3 at a glance).

Its got bluetooth so mouse and keyboard compatibility isn't a problem...I mean I don't see a problem.

I'd probably get something else, but that's because I don't use Amazon nearly enough to have a use for it and be stuck with that UI, not that I can't do everything i'd need it to do.

posted on 16 Sep 2012, 12:16 14

2. PapaSmurf (Posts: 7407; Member since: 14 May 2012)


That Ivy Bridge processor is going to make that Surface tablet fly....

I hope it succeeds. Consumers need options, and I think this is a good one.

posted on 16 Sep 2012, 12:17 13

4. good2great (Posts: 1039; Member since: 22 Feb 2012)


He's right... Windows doesn't need to be the "cheap option"...

you get what you pay for...

don't agree with all of his views and directions of the company but this statement and approach I respect. and i believe once people spend that cash on a Surface they will be blown away with the quality of the hardware and software of their device.

posted on 16 Sep 2012, 18:46 1

48. Whodaboss (Posts: 176; Member since: 18 Nov 2011)


I logged in just to give you a "thumbs" up!

posted on 16 Sep 2012, 12:20 13

5. drahmad (Posts: 478; Member since: 20 Aug 2011)


they have already sold one to me, no matter how high is the price

posted on 16 Sep 2012, 23:01

56. cepcamba (Posts: 717; Member since: 27 Feb 2012)


How did you purchase one?

posted on 17 Sep 2012, 06:18

58. Jimstar (Posts: 259; Member since: 24 Oct 2011)


Good, because it'll be 2 million GBP(or 3244800 USD, whichever you prefer). Your left arm, and first born child's chastity! Also the right to drive a car that doesn't have squeaky brakes and an engine that doesn't have an uneven idle.
Enjoy your surface!

posted on 16 Sep 2012, 12:27 6

6. techguy22 (Posts: 226; Member since: 09 Aug 2012)


LOL well good luck with that.
i knew windows 8 was just gonna fail miserably just like windows 7.
and MS wants marketshare. lol
now we have 199 N7 and 199 KF. there are no way windows 8 gonna take on apple or android if they dont have good price point.

posted on 16 Sep 2012, 12:39 6

10. PapaSmurf (Posts: 7407; Member since: 14 May 2012)


I actually like W7. XP is the best by far though.

posted on 16 Sep 2012, 12:42 7

12. Veigald (Posts: 226; Member since: 13 Jan 2012)


Yeah, windows 7 sure was a miserable fail alright. How much did it sell so far, like 500 million or something? Miserable!

posted on 16 Sep 2012, 16:29

43. nwright94 (unregistered)


Other than the nexus 7, most android tablets are lousy. Right now in the tablet market, android isn't exactly winning. The kindle fire and nexus 7 are probably the only android tablets sold in high volume. Possibly the galaxy tab 10.1. Other than that, android is not what people usually want when they go to buy a tablet. I have a feeling windows 8 will push android to the bottom of the tablet market unless everyone starts making nexus 7 like devices.

posted on 17 Sep 2012, 16:34

60. Jobes (Posts: 364; Member since: 27 Oct 2011)


AVATAR THIEF!

posted on 16 Sep 2012, 12:28 12

7. Dr.Phil (Posts: 865; Member since: 14 Feb 2011)


I don't think Ballmer understands that not all tablets offered at $200 are "chintzy" looking. The Nexus 7 is a beautiful looking device, and Google is selling it at around $40-$50 more than it costs to build. This enabled them to get some kind of cash flow while also increasing their market share.

If Ballmer prices the Surface at $500+, they will sell pretty much next to nothing. Consumers are still unsure of Microsoft as a maker of tablets instead of well-known OEMs like Samsung or ASUS. If they price it around the same price that the other manufacturers are going to be pricing their Windows 8 tablets then I can't see that many people picking Microsoft over the other ones. If they price it even at $400, then you will be competing with Android tablets in that range as well as the mindset of consumers that may be thinking "Well, if I spend just a little more money I could get..." That is why I think Microsoft needs to sell their tablet at $299. It would set them apart from the $199 tablet crowd while also setting itself apart from the tablets in the $400-600 range. Consumers wouldn't think it was too cheap, but they also would admire that it offers a lot for a good price.

In the end, it's their choice. Either they can offer it at $299 or they will suffer the consequences once the rumored Nexus 10 tablet is introduced for probably the same $299 price.

posted on 16 Sep 2012, 12:36 5

9. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)


bravo....bravo! very good perspective my friend and that 299 mark will do just what you said, show that they are not too cheap and as well provide enough features and performance to keep up with the higher end tablets......very reasonable perspective and logical at that

posted on 16 Sep 2012, 12:41 6

11. PapaSmurf (Posts: 7407; Member since: 14 May 2012)


Well written. If its overpriced, not many people would buy it. But then again, we have the iPad...

posted on 16 Sep 2012, 17:06

46. meowcenary (Posts: 187; Member since: 13 Apr 2012)


Hence the need to price it at a price point that consumers would notice or at least be curious. Also MS needs better PR for their products. Without it, just tossing a price point out their would not win them anything.

posted on 16 Sep 2012, 18:57

49. Whodaboss (Posts: 176; Member since: 18 Nov 2011)


Over priced? Is relative. If you think $499 is too much, then it's too much for you (or anyone else who thinks it's too much). But I on the other hand think that would be a very reasonable price if the product lives up to expectations. And I will purchase one at that price.

More importantly, like I always state this is a consumer market. It's your choice to purchase what you like and what you can afford. Mr. Balmer believes his product is superior to the other products available. The consumers will eventually change his mind on that or reward him for that train of thought. At this moment, based on what I've seen and read a Surface is one product I'm waiting to purchase regardless of price - of course that's providing it's not $699.00 or more.... ^_~

posted on 16 Sep 2012, 12:51 3

14. max9777 (Posts: 59; Member since: 11 Dec 2011)


But you also have to look at it from this point, I grew up on MS, I have a macbook air that's covered in dust, laptop is amazing, turns on fast runs great, but I just don't like mac OS. It's all about personal preference. MS still leads the world with PC's, because it has been there for ages. People will buy the tablet even if it is $500. If people did not buy MS products OEM's would not be releasing all these products every month..

Personally I think Surface would do great in sales, maybe not as strong as apple, but the tablets will sell.

For decades MS and Apple were in competition and it's good too see that MS jumped on the hardware wagon rather than just software. Maybe now if MS does things properly they will lower the price of their OS, and start leading the production in great hardware, they will succeed

posted on 16 Sep 2012, 13:28 2

25. Owlet (Posts: 446; Member since: 21 Feb 2011)


I personally don't agree, Dr. You're thinking about yourself, but maybe MS simply can't afford to sell that cheap. Sounds like they're not going to save on anything. The other thing is - some people actually do want to buy expensive high quality stuff. And they won't even consider all those cheap options you are talking about. I agree, they are not the majority, but do you always have to cater to the average Joe agonizing over the price and how he can swing it? I don't see Mercedes, or BMW, or even further, Ferrari, Maybach and so on going out of business. I also disagree that people won't choose over some established Android brands. It's Microsoft, it's not like some Oppo nobody ever heard about. I personally think the tablets will finally actually become functional. They aren't right now, you have to agree. They're fun toys to play with, but you constantly run into all kinds of limitations and inconveniences for it to be a true business tool. MS will change that.

posted on 16 Sep 2012, 13:34 1

28. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)


its your opinion indeed but if they dont make the price at a balance jus know their sales wont get very far with the competition out there

posted on 16 Sep 2012, 12:29 2

8. threed61 (Posts: 123; Member since: 27 May 2011)


Of course if there are two high end options, consumers are likely to buy the one with the most apps and services, which would be the iPad. They need to get the price down on the RT. They'll also need to demonstrate that people who don't post on tech blogs actually want a tablet running full Windows.

posted on 16 Sep 2012, 12:47 2

13. RomeoJDR (Posts: 237; Member since: 09 Dec 2011)


HP tried entering the tablet market with a price comparable to the iPad and it failed. Blackberry tried entering the tablet market with a price similar to the iPad and it failed. Android manfacturers entered the tablet market with comparable iPad pricing and they failed until later when some realized the need to offer a quality cheaper alternative to the iPad. And, what have Windows phones done up to this point? Failed.

posted on 16 Sep 2012, 12:58 2

17. speckledapple (Posts: 877; Member since: 29 Sep 2011)


Not sure about windows phones as that is still to be determined but your right about some of the other players. HP just produced a poor tablet while although the Playbook was not poor it has missing features that should have been standard. Both companies failed because they simply responded with a substandard product rather than produce something that would be ample for competition.

I do not think Microsoft will make the same mistake in this case as Win * definitely has the features to go toe to toe with any tablet. Besides it is a full os in comparison.

posted on 16 Sep 2012, 13:12 1

22. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)


"Win * definitely has the features to go toe to toe with any tablet. Besides it is a full os in comparison."

a question to think about.........what does the windows operating system have that the nexus 7 and ipad three don't already have?

posted on 16 Sep 2012, 14:18

34. Zero0 (Posts: 571; Member since: 05 Jul 2012)


Microsoft Office and an interface that matches Windows 8 on the desktop.

Those are going to be Surface's killer features.

posted on 16 Sep 2012, 14:24

37. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)


again it will suffice for a "specific" group of people, but if the company is looking to expand their sales and gain more fans then they will have to provide what is already given...........AND MORE.........or at least more than what the competition is offering at least...........to be frank, if they want more sales then they must widen their views and options on their products..

posted on 16 Sep 2012, 14:49

38. Zero0 (Posts: 571; Member since: 05 Jul 2012)


I very much agree with you, as I personally could care less about using office software on a touch screen device, and I don't care for Windows in general.

The impression that I get is that Microsoft intends to sell the Intel version of the tablet as an enterprise device. It runs desktop Windows, so it will be compatible with Windows workstations.

The ARM Surface is a tough sell, I think. It's not x86 or x86_64, so programs won't be cross-compatible with the desktop, and the iPad and Nexus are running much more reputable tablet OSes.

posted on 16 Sep 2012, 14:49

39. papss (unregistered)


I'm sorry while the nexus 7 is an amazing tab at an amazing price to me it still looks and feels cheaper. While I'm no apple fan at all the iPad kills it in every way other that the superior UI on andriod.

posted on 16 Sep 2012, 14:54

40. Zero0 (Posts: 571; Member since: 05 Jul 2012)


Considering that the Nexus 7 is cheaper, that's perfectly okay with me.

If you want a fair comparison, put the iPad up against the ASUS Transformer Infinity. There are still areas where the iPad excels (app support, website compatibility), but it's not as big of a difference.

posted on 16 Sep 2012, 17:48

47. RomeoJDR (Posts: 237; Member since: 09 Dec 2011)


Absolutely right. The Infinity is just as good if not better, yet the sales are not even comparable. Not even Android yet has the market share in the tablet arena to compete at the same pricing scale even with products just as good. Luckily, products like the Kindle Fire and Nexus will slowly bring the masses, so top tier tablets on Android will eventually compete.

posted on 16 Sep 2012, 13:18

24. RomeoJDR (Posts: 237; Member since: 09 Dec 2011)


Windows phones have been out for awhile and they have like a 2-3% market share. The Lumia is a pretty damn good piece of hardware with a lot of marketing that never gained any real traction. I remember not too long ago when Mango was supposed to be the OS that would steal the show.

posted on 16 Sep 2012, 13:12 1

21. RomeoJDR (Posts: 237; Member since: 09 Dec 2011)


What happened to HTC when their CEO stated they were a premium manfacturer and would not compromise their reputation by releasing cheaper devices? Their market share crashed. Does anyone remember the Jetstream or Flyer? Those were actually great devices with a premium build that were unfortunately priced out of relevance. The Surface looks to be a great device. But when you have people already invested in a different OS, with good products priced signicantly less your not going to win anyone over. Note to Ballmer: you cant be late to the game and expect to come from behind without taking an initial hit on your bottom line. The only hope RT has is for other manufacture to use the OS in premium devices without the so called premium price.

posted on 16 Sep 2012, 12:52 3

16. valapsp (Posts: 469; Member since: 12 Aug 2011)


Customers: Don't expect us to buy an expensive Surface.

posted on 16 Sep 2012, 13:04 1

19. sbr999 (Posts: 79; Member since: 05 Jun 2012)


You get what you pay for, though a Nexus 7 is quite lovely AND cheap. Let's see how this "Surface" will be. I am curious

posted on 16 Sep 2012, 13:42 1

32. valapsp (Posts: 469; Member since: 12 Aug 2011)


I already have a Nexus 7 but I really love the Surface.

posted on 16 Sep 2012, 13:04 2

18. Peter27 (Posts: 233; Member since: 13 Jul 2012)


I think you all are wrong. Ms needs to sell their tablets high and keep them high to show it is great product. They need to create hype that iPad has. First generation iPad is too outdated but it still sells twice more then done latest Android tablets.
MS is going to be great since it's going to keep all compatibility with PC. I have tablet and it's getting dust. Why? Because I can't run anything there from my laptop.
This is where MS is going to lead and people soon realize that iPad is useless since you can't do much there.
People must not start feeling that the surface is cheap tablet that is why they need to keep prices high!!!

posted on 16 Sep 2012, 13:36

30. Owlet (Posts: 446; Member since: 21 Feb 2011)


Totally agree with you.

posted on 16 Sep 2012, 13:06 1

20. ajac09 (Posts: 1344; Member since: 30 Sep 2009)


and you just killed any possible sales of the surface.

posted on 16 Sep 2012, 13:16

23. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)


hahaha is exactly what i thought when i read the first line of peter27 post.....lol

posted on 16 Sep 2012, 13:33

27. Kronic (banned) (Posts: 321; Member since: 11 Sep 2012)


Wait for the galaxy tab 11.6. It's coming to eat this thing alive. Don't buy this crapy tablet and become Metrosheep! ;)

posted on 16 Sep 2012, 20:08

52. Owlet (Posts: 446; Member since: 21 Feb 2011)


I have Galaxy Tab 10.1 and it's not even close to replacing a PC. Don't get me wrong, I love it, use it every day and enjoy it immensly. But, it's more a toy. It seems like MS tablet will be able to bring an almost PC-like experience.

posted on 16 Sep 2012, 13:34 1

29. rusticguy (Posts: 2819; Member since: 11 Aug 2012)


Apple model of "Look and Feel" marekting. So now one can expact to have org@sms just by looking that "Surface" just like those who favored idevices claimed they ahd one holding them... What crap. Better to stick to android world as far as posible unless there's something which cannot be done on adroid devices that can be done on these so called "rorg@smic" devices from jailed OS.

posted on 16 Sep 2012, 13:40 1

31. RomeoJDR (Posts: 237; Member since: 09 Dec 2011)


Look at the price difference between an Apple computer and Windows computer with similar specs. If people could by an Apple for even close to the price of the a windows computer then that would be another market Apple would dominate. Why would anyone think that Microsoft can compete against Apple with the same prices in a tablet market already dominated by Apple.

posted on 16 Sep 2012, 14:00

33. Kronic (banned) (Posts: 321; Member since: 11 Sep 2012)


I totally agre with you. I've had The new iPad for 2 months now and am loving it.

posted on 16 Sep 2012, 14:18

35. omacmagics (Posts: 42; Member since: 27 Dec 2011)


The most I can see myself spending on the pro is probably 900US since it can take the place of a laptop in doing everything, wait does this thing come with a CD ROM drive? I don't have a laptop so I'm thinking now would it be wise to get a laptop instead and buy a cheap tablet instead( Nexus 7) That's a tough call for a first time buyer like me.

posted on 16 Sep 2012, 14:21

36. jibraihimi (Posts: 657; Member since: 29 Nov 2011)


Mr. Balmer plzzz stop making those monkey face, like you surprised us with your strategy. In first place we were never expecting any cheap or competitive pricing from you for surface tablets, because we know like Apple you also believe in fooling your customers by overpricing your products............ So now instead of fooling around plzzz announce the pricing and availability of Surface pro, so that we can start saving for it..........

posted on 16 Sep 2012, 15:54

41. intos (Posts: 85; Member since: 06 Jan 2012)


i like a lot the new user interface of windows 8... but this face of that guy ballmer it pissing me off !!! i dont no why !!

posted on 16 Sep 2012, 16:16 1

42. jlscott777 (Posts: 45; Member since: 10 Feb 2012)


I hardly think Microsoft will price their surface to compete with the likes of the Nexus 7, the RT version will most likely be priced to compete with the ASUS transformer type tablets and the full Windows version will be priced more in line with ultrabooks which it almost is.

posted on 16 Sep 2012, 19:15 1

50. RapidCat (Posts: 351; Member since: 12 Jun 2012)


i love this surface
because surface is full pc

for phone i choose android.

posted on 16 Sep 2012, 20:45

53. pongkie (Posts: 493; Member since: 20 Aug 2011)


don't expect me to buy your tablet either.... because i'm cheap XD

posted on 16 Sep 2012, 21:41 1

54. VJo003 (Posts: 320; Member since: 11 Mar 2012)


3 months since it was first showcased & still no word on price/date.
Balmer should learn to create hype & ride the wave like Apple instead of making these meaningless statement once in a blue moon just to tell us that he is still alive.

posted on 17 Sep 2012, 08:16

59. pikapowerize (banned) (Posts: 1869; Member since: 03 May 2012)


i still think that they need to be cheaper but still build top notch! iPad and android still rule the tablet game even win8 and WINDOWS is the world's most famous OS they still need to market surface on the price cheaper than iPad but build like the iPad!! so i think $300 is a good price!

but still 7" is a good size for people and students but the UI of win8 dont look good on that size! the WP8 UI does! so im hoping that Microsoft will allow nokia to make a 7" tablet with WP8 on it!

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