Microsoft's Surface Windows 8 Pro: Far too expensive to be a hit - Computerworld (blog)

If Microsoft hopes to make inroads in the tablet market, it's going about it in a very odd way: Pricing its products too high to gain much market share. The latest instance is the just-announced prices for the Surface Windows 8 Pro tablet, at $899 for a 64 GB version and $999 for the 128 GB version.

Panos Panay, General Manager of Microsoft Surface, announced the pricing on the Official Microsoft Blog. He also announced that the Surface Windows 8 Pro will be available in January.

Those Surface prices, by the way, don't tell the true cost of the Surface models. Prices don't include a Touch Cover or Type Cover, which cost at least $120. So that puts the prices at $1019 for the 64 GB version and $1119 for the 128 GB version.

You can buy an iPad for $499 (with 16 GB only; it costs $599 for the 32 GB model, and $699 for the 64 GB model.) So why would you want to pay more than $1,000 for a Surface tablet?

The answer is that you wouldn't. At these prices, Surface Windows 8 Pro tablets are clearly aimed at enterprises, not the consumer market. And some analysts believe that Microsoft set the prices so high not in order to sell a lot of them, but to allow its competitor's prices to seem like bargains, and so help them sell plenty of those.

Carolina Milanesi, an analyst at Gartner, told Computerworld:

"The Surface Pro pricing leaves room for device makers to come down in price without compromising margins too much. This is an enterprise play, not a consumer play, at least for now."

One benefit of the Surface Windows 8 Pro over the RT-based Surface is that because it runs Window 8 rather than RT, it will run desktop apps, which the RT-based Surface won't do. But at more than $1,000 that's a steep price to pay. Enterprises can an buy Windows 8 notebooks or even ultrabooks for less money.

There's another problem with aiming the Surface Pro at the enterprise market: Enterprises aren't particularly keen on Windows 8 at the moment because it breaks so significantly with past versions of Windows. And in a BYOD world, there's no reason to choose a Windows-based tablet over an iPad.

The upshot? Because of its pricing, I don't expect the Surface Pro to be a winner.