Microsoft Corporation (NASDAQ:MSFT)’s Surface Tablet Might be Surprising Priced at $199

Microsoft Corporation (NASDAQ:MSFT)’s Surface Tablet Might be Surprising Priced at $199

According to Computerworld, Microsoft Corporation (NASDAQ:MSFT)’s Surface for Windows RT tablet is priced at $199 and will be shipped on the 26th of October. The price is astonishingly low by Microsoft standards. But analysts have predicted that Microsoft is planning to make up losses via apps and media sales for the device. The common theory is that the technology giant wants to surpass its rivals, Google and Amazon, who have released their own tablet devices called Nexus 7 and Kindle Fire respectively at $199.

Microsoft has retained continuous silence about the pricing of the Windows RT tablet. Earlier it had quoted that the cost would be at par with Windows RT tablets from makers like Asus. IDC analyst Tom Mainelli has clearly stated that a $199 price for Surface RT is not possible due to the exorbitant cost of materials used for manufacture. The price will hover around $600. However, if Microsoft does manage to keep the price at $199, then it will be much easier for them to get a grip in the already crowded tablet market.

But the low cost will put Microsoft’s OEM (original equipment manufacturer) partners like Asus, Dell, Lenovo and Samsung in a huge fix as they will not be able to make up the price point. The problem lies in the fact that the manufacturers need to shell out big bucks to Microsoft for the operating system, but unlike Microsoft they can’t cover the losses with the sales of apps.

Jack Gold, an analyst at J. Gold Associates believes that Microsoft will need a miracle to put a price of $199 on its Surface RT. But the sales will shoot up and strengthen their position and help them to get more market shares. Gold further states that OEM’s will be facing a grave issue, but Microsoft should let them fight the low-cost price wars with Amazon and others, rather than butting in.