[PCWorld]

Post your comments for Microsoft Surface: More profit per tablet than Apple's iPad? here

[Chasar]

I bought 64GB Surface and every time I open to read the new it keep flashing this update of Flash something. What to do , is mu Surface not update at all?

[Mithrandir48]

Microsoft must remember where it sits with the tablet and PC market. Sure it can make a healthy profit on these tablets but it must remember it showed up late to the game and to gain market share it must out do Apple in everything including price. A smart move would have been to set the price of the Surface RT at $399 and have the keyboard/cover sell for $35 (not $100) since it is a key feature in making this product interesting, different and innovative. If Microsoft were to follow that price point they would make a huge dent in Apple's market share; still make $100+/tablet and be sure that nearly everyone would buy the keyboard cover with their new tablet (while still making double their money back on the keyboard). Keeping the Surface RT at high prices might work for the initial month or two but sales will struggle after the holiday season. I'm guessing that Microsoft will implement these new price points I just explained sometime in the spring of 2013.

[thewazak]

"Keeping the Surface RT at high prices might work for the initial month or two"
Well, duh! It's called market strategy.
MS will indeed have room to move on price should it be felt necessary.
It would have been stupid to start low - then have to drop to fire sale prices.

MS "showed up late to the game"
Not true. This product puts the iPad in the shade. Apple is now the competitor.
At the moment, it is Apple who are late to the game with the mini.

[Scott97]

Quote

Microsoft must remember where it sits with the tablet and PC market. Sure it can make a healthy profit on these tablets but it must remember it showed up late to the game and to gain market share it must out do Apple in everything including price. A smart move would have been to set the price of the Surface RT at $399 and have the keyboard/cover sell for $35 (not $100) since it is a key feature in making this product interesting, different and innovative. If Microsoft were to follow that price point they would make a huge dent in Apple's market share; still make $100+/tablet and be sure that nearly everyone would buy the keyboard cover with their new tablet (while still making double their money back on the keyboard). Keeping the Surface RT at high prices might work for the initial month or two but sales will struggle after the holiday season. I'm guessing that Microsoft will implement these new price points I just explained sometime in the spring of 2013.

It's a good thing you are not running Microsoft otherwise the company would be bankrupt! The cost per tablet in the article doesn't take into consideration the costs of marketing, transportation/ distribution, R&D, and other overhead. If MS reduced the price to $399 there would be no room to recover these costs and no room to eventually make a profit.

[Mithrandir48]

thewazak, I agree that this Surface RT is probably better than the standard Apple iPad but the normal consumer won't notice the difference since the average person uses their tablet to look at e-mail, the web, videos and a couple of simple games. Even I don't think the difference between the Surface RT vs iPad 3 vs Nexus 7 is large enough to motivate me to buy the Surface RT (over the others), the Surface Pro 8 is another story (the price point on that product is very important as well). MS showed up very late to the game (about 2+ years late at least) as far as tablets are concerned but they took their time and hopefully they've created a product that can compete and eventually win in the PC/tablet market. I guess if MS is only going with this price for the short term (until the initial couple of batches sell out) then it's a good move but as soon as suppliers have to sit on inventory it becomes imperative to lower prices and undercut Apple...MS could end up dominating the tablet market if the price is right. I agree that Apple did come late to the game with the mini and they completely followed Amazon and Google's path on that one. My main point is that MS has a chance to completely destroy Apple at the tablet game, have a good competition with Google (Google will always have lower prices since they don't have to make a profit on their hardware due to other revenue sources in the product) and be nearly as dominate as they were in the PC market. I suppose if they take the extra profits they have now and invest it into app development (paying developers to code in RT/Win 8 and to make app development easier) it might be a great move.

[Mithrandir48]

Quote

It's a good thing you are not running Microsoft otherwise the company would be bankrupt! The cost per tablet in the article doesn't take into consideration the costs of marketing, transportation/ distribution, R&D, and other overhead. If MS reduced the price to $399 there would be no room to recover these costs and no room to eventually make a profit.

Take a basic economics course, when you lower the price you get more sales...the costs of marketing and R&D are static and do not change per device (transportation and distribution costs are very small, <$10 per device even this decreases as volume increases to an extent). If they can increase sales by 50% with the price at $399 they will be in a much better position than if they made 50% fewer sales at $499 because they gained market share which takes money away from their competition (which leaves the competition with even less money to develop their next product). Being $100 cheaper than Apple with a better product makes that 50% number very realistic.

[onami2012]

What is the BOM cost of the iPad 3? Is the cost delta primarily in the display?

Apple makes its own processor, the iPAD has 1GB of DDR memory and ships with less flash than Surface and is sold for more $$$. It is hard to believe that the Surface makes more $ per device sold.

But since iSuppli says so and Engadget is running the story, I guess it must be true.

[MacNewton]

Quote

Microsoft must remember where it sits with the tablet and PC market. Sure it can make a healthy profit on these tablets but it must remember it showed up late to the game and to gain market share it must out do Apple in everything including price. A smart move would have been to set the price of the Surface RT at $399 and have the keyboard/cover sell for $35 (not $100) since it is a key feature in making this product interesting, different and innovative. If Microsoft were to follow that price point they would make a huge dent in Apple's market share; still make $100+/tablet and be sure that nearly everyone would buy the keyboard cover with their new tablet (while still making double their money back on the keyboard). Keeping the Surface RT at high prices might work for the initial month or two but sales will struggle after the holiday season. I'm guessing that Microsoft will implement these new price points I just explained sometime in the spring of 2013. It's a good thing you are not running Microsoft otherwise the company would be bankrupt! The cost per tablet in the article doesn't take into consideration the costs of marketing, transportation/ distribution, R&amp;D, and other overhead. If MS reduced the price to $399 there would be no room to recover these costs and no room to eventually make a profit.

[MacNewton]

Like the Xbox Microsoft did not make a profit until many years later. Microsoft knows at this product must sell and they need to advertise everywhere they can. I have no clue what their budget is but I think it's probably in the billions. Most PC users that I have surveyed have not heard of the Microsoft surface RT. Unfortunately for Microsoft the word is not getting out and they'll need to spend more money on advertising to have their products noticed. Expect to see big time advertising on all major channels in the next coming months. Dog and pony shows at morning news stations and TV shows will be common occurrence.

The surface RT operating system is not is not windows and there lies the problem. The confusion is that most people after seeing the product advertisement assume that it will run Windows applications. Just like when Apple originally came out with the iPad it had to have its own operating system which of course was the same as their phones. Apples operating system was well-established with their iPhone product-line before they brought out their portable device called the iPad. Microsoft unfortunately had many failed launches of Windows 7 phones and their windows eight phones just was launched recently.

On a different point completely have you noticed that the windows user interface " Metro" looks a lot like LACARS used on Star Trek?

[zzzxtreme]

i really want an intel surface. i know many IT professionals who work on microsoft platform do

[yogajitsu]

In 2 months they will offer a discount

[SeanPh]

they better be, cos surely the current price is too over the top for a product that doesn't run windows's softwares.

[arthurbas]

As "thewazak" said this is a strategy. If you see the Surface at $399 or less, what are you going to think. "This tablet does not have the quality of an iPad".

If they put this price under the iPad people will think, that this Tablet will not compete because of the quality.

Of course I would like to see it with lower price to buy one.

And I also agree that the keyboard could cost less, $100 it's too much. I can say it could cost $50-$60 top.