Posted on 10/16/2012 3:03:19 PM PDT by SeekAndFind
A few weeks ago, I urged Microsoft to shake up the tablet market by selling Surface at a radically low price: $150 or less. Crazy? Perhaps. But I wasn’t alone. Vivek Wadhwa made a similar argument here.
So it was disappointing today to see the company announce the starting price of $499. Sure, it puts it in range with Apple’s iPad. But it feels timid. It feels like a price that says: What’s the lowest we can go to match Apple? Microsoft seems to be betting that it will win on features when consumers compare the iPad to the Surface side by side.
Which they won’t. Beyond that, a growing number of folks are locked into the Apple ecosystem. People like me who have an iPhone, iPad, MacBook, and Apple TV.
Why would I insert a non-Apple device into that system? Saying it has slightly more memory, or the ability to run Flash is not going to be persuasive for most consumers. They’re going to look at similar price points, see all their friends have iPad, and go in that direction, too. Logic is often pitted against emotion when it comes to consumer behavior.
And that has allowed Apple to maintain a 68 percent share of the tablet market. A number Apple claims has gone up from 62 percent even as more tablets have entered the market.
The reason I called for the radically low price hearkened back to Hewlett-Packard’s TouchPad. When HP decided to have a fire sale, it priced them at $99. And as I noted before, they suddenly flew off the shelves.
Amazon has also taken this to heart, pricing the Kindle Fire at $199. Reportedly the company has been willing to lose money on the device but make that up through sales of books and other digital media.
Microsoft needed a similar line of attack. Get Surface into as many hands as possible. Get developers excited about the Windows 8 platform.
Because don’t forget, this month Microsoft isn’t just introducing Surface. It’s launching Windows 8 for desktop and laptops. And soon we’ll have Windows 8 phones. That’s a lot of new stuff for consumers to absorb. Microsoft ought to think about what it’s going to cost for a consumer to overhaul their whole ecosystem of gadgets.
At the announced price, I’m guessing that Microsoft is hoping that IT managers will be persuaded to give it a look, which then might be the road into consumers’ hearts. There are enough IT managers out there who still don’t like the iPad as a workplace tool, but are getting heat from employees who want to bring in the iPad and iPhone. They might see Surface as a better productivity tool, and a way to get employees off their backs by giving them some kind of tablet.
But that’s a stretch. Those big corporate buying cycles are long. And Microsoft would still need to make the case that the Surface is a necessary productivity tool when that IT manager could but their employee a laptop for a price in the same range.
Now, when Apple released the first iPhone, they also famously made a quick course correction by dropping the price $200 just a couple of months later. So, Microsoft could still try this option as the holiday season kicks in if the Surface doesn’t fly off the shelves.
But if Surface gets off to a slow start, Microsoft is going to have a tough time escaping a quick judgment that it’s failed in this critical market.
Chris O'Brien is a business and technology columnist at the San Jose Mercury News. He has covered Silicon Valley for more than a decade and covered everything from the dot-com and bust to the rise of Web 2.0. He became a columnist in 2008 and focuses on the people, ideas and companies that drive the region's innovation economy.
It’s a great price, considering that it comes with a full copy of Microsoft Office. This tablet is a laptop substitute, rather than the toy that the Ipad is.
For that price range, I would find a laptop more useful, but that is me.
It's not a full laptop substitute, but that's the trade-off - 2 lbs of hardware vs the 6 lbs for the average laptop in exchange for decreased capabilities. Besides, the Surface isn't competing with laptops - it's competing with the Ipad and the various Android clones. The problem for Microsoft has been the proliferation of tablets that are now hogging device market share that used to go to PC's. Microsoft doesn't need to make a tablet, but it needs to have its partners make tablets based on a Microsoft OS and Office. The Surface is its entry into this new market.
I would be very interested in a tablet version of Outlook running on an exchange network. Very interested.
It worked for Microsoft before. It brokered DOS to the IBM PC entry, which became the enterprise acceptable machine in 1980.
Own the enterprise space and the consumer space will follow.
Apple works the other way around.
I would be willing to trade my iPad for one of those. Maybe a new way to capture some market share.
“A few weeks ago, I urged Microsoft to shake up the tablet market by selling Surface at a radically low price: $150 or less...”
And to think people like this collect a paycheck for stuff this stupid.
I guess when you work at a blog you can say as much stupid stuff as possible.
This range of products offer high technology and the benefits of competition.
I use an HTC Evo 4G smartphone, and an Asus 14” Core i3 laptop.
In other words, I straddle the tablet format. I need the phone a lot for business.
I need a computer, but it does not need to be a touch tablet.
Asus is close to marketing their smartphone-tablet combo called “PadFone”
—smart phone
—tablet
—keyboard option
all with one phone account
Looks good to me, and it is android which is tried and true.
I can see the need for one or two devices. I cannot see the need for three or four devices.
I have a Xoom, but would give it to my wife in a nano second in exchange for a Windows based tablet that ran MS Office and other similar MS software. The iPad is cute if you want to look at pictures or interface with your phone, but as a work tool it’s a child’s toy. Everybody in my family except me and my niece have iPads and iPhones and all they use them for is sharing pictures, playing games and watching movies. I need something that will replace my laptop as a work station. The Xoom isn’t much better than the iPad in that regard, but I hate Apple products so it will do for now.
Now that you’ve delivered your opinion, would you care to explain to us stupid people why it’s stupid?
This range of products offer high technology and the benefits of competition.
I use an HTC Evo 4G smartphone, and an Asus 14” Core i3 laptop.
In other words, I straddle the tablet format. I need the phone a lot for business.
I need a computer, but it does not need to be a touch tablet.
Asus is close to marketing their smartphone-tablet combo called “PadFone”
—smart phone
—tablet
—keyboard option
all with one phone account
http://www.asus.com/Mobile/PadFone/
Looks good to me, and it is android which is tried and true.
I can see the need for one or two devices. I cannot see the need for three or four devices.
“Now that you’ve delivered your opinion, would you care to explain to us stupid people why it’s stupid?
“
Because Microsoft isnt going to sell a well-designed device for less than a cheap Android tablet just to appease some cheapskates insane notion that they “need” to do this in order to get people to but it.
This isnt a welfare tablet. If you can dump 500.00 on a cell phone + Digital Cable plan for 3 months, then you can afford this.
Surface supports Flash???? Just follow the porn industry to profits...
That "toy" has a much larger ecosystem built around it and at the end of the day is going to sell far more units than the Microsoft tablet ever hopes to.
My Microsoft Rep was in my office last week touting the device saying it'd come in at a "very competitive" price compared to the iPad I had in my hands. $499 is competitive? In Microsoft's dreams maybe, but not in mine. I'd have run right out and bought one for $300'ish, but not $499. I'll upgrade my current iPad I to an iPad III instead, now that I know I'm not going to buy Microsoft's tablet.
I say that as a life-long MS guy who's made a very successful living building large enterprise class Windows environments and only acquired his first Apple device three years ago (an iPad I) as a fathers day gift. I use my iPad more than I use my laptop and desktop combined now.
Good for you. The tablet market is big enough for both Ferraris (Ipads) and Toyotas (Android and Windows clones).
Welp...all I can say is, if I can sell x units at 500 a pop, and 2x or 3x units at 200 (not saying I can), not doing so would be...what’s the word...stupid.
Maybe they don’t think they can. Maybe I think they could sell me one for $200 but not $500. Maybe that’s just me.
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