Surface Pro and RT Tablets Too Expensive: Is Microsoft In Trouble Against iPad and Android?
Microsoft had, and still does have, high hopes for the Surface RT and Surface Pro tablets, but it looks like the devices may not be selling as well as expected. That leads some analysts to question Microsoft's pricing strategy, and ask: is the Surface line is simply too expensive?
According to Eric Bleeker, Motley Fool's senior technology analyst, Microsoft is stuck between a "rock and a hard place" with the Surface tablets. Apple's iPad is still a dominant force in the arena, and Android is seeing enough success to cast doubt over the Surface's ability to make headway.
As TabTimes reports, Bleeker thinks that if Microsoft cuts the cost of licensing Windows 8 to $30, it would be because of underwhelming Surface RT performance and fierce competition from Apple and Google. Even that, he said, won't help unless the price of the tablets themselves is lowered.
"Microsoft is cutting licensing costs but what you have to think about is the rock and hard place that Microsoft is in in the tablet space," Bleeker said. "At one end you have Android, a relatively proven platform, selling down to $100 and $200 and at the other end is Apple. And you think about the iPad mini for a second and that starts selling at $329."
Basically, he's saying that Microsoft was nuts to sell the Surface RT, which cannot even run the full suite of legacy Windows programs and only supports apps from the Windows app store, for $500. If the iPad mini is more than $150 cheaper and has arguably more capabilities, where is the Surface's advantage? The Surface Pro faces its own problems with low battery life and a price tag of up to $1,000.
"The problem with Surface was that it was priced a bit too high," Bleeker said. "If you look at the initial price of $499 for the entry-level Surface, you need an extra $100 for the keyboard which is a near necessity. And following the Surface we haven't exactly seen a flood of Windows 8 tablet interest, partly because of the Windows expense licensing model. So you can see how it's going to be an uphill struggle for Microsoft in this segment."
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