PC vendors afraid a $199 Surface would price their Win RT efforts out, Microsoft shoots for 30% tablet market share

PC vendors afraid a $199 Surface would price their Win RT efforts out, Microsoft shoots for 30% tablet market share
PC vendors are allegedly at arms about the rumored $199 price for the Windows RT Surface tablet that leaked yesterday, deliberately or not. The Nexus 7, they say, with its lowball pricing at cost, has undercut the sales of other 7-inchers tremendously, and has even encroached on the 10-inchers market territory since launch, so they rightfully expect the same thing to happen with a $200 Surface RT tablet. If Microsoft sells it only in the US, they say, or in limited markets like the Nexus 7, then the rock-bottom pricing wouldn't bother them this much.

Yesterday Acer's CEO directly pleaded that Microsoft reconsider the price gap it is intending to put between its own RT tablet and the other industry efforts by its company, but also by Asus, Samsung, Dell and Lenovo, which are all reported to be working on RT slates, unlike Toshiba and HP, which already said they will be focusing only on the Intel-based side of Windows 8.

That is the reason, sources say, that Microsoft might be aiming for at least 30% of the tablet market, as it feels it has offended its PC maker partners, and will likely have to do it on its own. The $199 price tag for the RT Surface will certainly be the best way to achieve that lofty 30% market share goal, but it might also have to eat a huge loss, if the production costs are much larger than two Benjamins.

Considering that IDC forecasts north of 200 million media tablets to be in circulation worldwide by the end of this year, Microsoft would have to sell about 70 million of its slates, ARM and Intel, to achieve its share target. If it eats $50 loss on each RT Surface, it will be quite the amount in the end, but the critical mass of users and developers such a market share would attract might turn out to be more valuable than a billion or two loss. After all, it just wrote off $6 billion from the aQuantive acquisition not long ago, and that didn't really accomplish anything, whereas the tablet market is the next huge growth area it can't afford to miss out on, even if it has to do it on its own.

source: Digitimes



10. Whodaboss

Posts: 176; Member since: Nov 18, 2011

Count me in as part of the 30%! I hope it's $199. That means I can get both an RT and Pro version! Awesome!!!!

8. speckledapple

Posts: 902; Member since: Sep 29, 2011

They scared but I am glad Microsoft is doing this as it should light a fire under their butts to put out some awesome hardware at great prices. Anything less would be pointless. If your going to do it, do it big.

7. downphoenix

Posts: 3165; Member since: Jun 19, 2010

This will be undercutting their OEMs too much, who will just end up sticking with Android or experimenting with touchscreen Linux tablets using Ubuntu or similar builds instead.

5. mas11

Posts: 1034; Member since: Mar 30, 2012

Damn for $199 if it's as powerful as the Nexus 7 this will be a really hard choice for me.

6. Henrik

Posts: 141; Member since: Feb 18, 2012

The Surface has premium materials and premium build quality, and is made entirely out of ultra lightweight magnesium. The Nexus 7 is made out of plastic and has no premium build quality at all. Tough choice? Not really. http://www.youtube.com/watch?v=dpzu3HM2CIo Winner.

9. mas11

Posts: 1034; Member since: Mar 30, 2012

That's true I also hear it's a 10.1" with tegra 3 so I think Surface is better.

2. RamyRamz69

Posts: 390; Member since: Dec 12, 2011

In my honest opinion, I think with the introduction of Windows 8 touch laptops, tablets will not die, but will lose a lot of market share. I for example, bought a Sony Tablet so I can play mini-games such as Angry Birds, do light web browsing on my couch, read some books and use the IR Remote Controller app. I do have a Laptop which I use everyday, but if I had a laptop with great horse power such as an Intel I5 processor that can game on steam, have full functionality of MS office, include ports such as VGA, HDMI and USB 3.0, can use touch screen apps such as Angry Birds or Cut the Rope AND is lightweight; then there is no reason why I should buy a tablet(Android, iOS or Windows RT) to be honest... Yes I will be missing some applications, but hey; I already have an app store with MUCH of developer support that are probably gonna increase the amount of apps

3. TylerGrunter

Posts: 1544; Member since: Feb 16, 2012

The issue for Microsoft is that your reasoning can be done the other way around: if I had a tablet with a good office suite, good horse power, includes ports as HDMI (MHL), USB 3.0 and a docking keyboard then I would not need a laptop. :D The tablet and laptop markets are slowly converging, so right now there is a real fight to see which OEMs and OSs can get the most of the market. Next months will be quite interesting in that regard.

4. MobileCaseReview

Posts: 242; Member since: Feb 10, 2012

I agree completely. Your average laptop/pc user does not require high horsepower computers because most of them use it for basic media and web browsing. Basic media not referring to steam and their plethora of games, but basic streaming - netflix, hulu, youtube etc.

1. kainy

Posts: 165; Member since: Aug 10, 2011

Cant wait for next few months :)

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