Surface Doomed To Come In Fourth Place At Best

Microsoft Surface Price Too High, Says Sterne Agee - Business Insider

Microsoft is charging way too much for its Surface tablet, and it's doomed to come in last place, says Sterne Agee analyst Shaw Wu in a new note this morning. With Microsoft charging $499 for an intro level Surface without cover, and $599 for the Surface with its keyboard cover, Microsoft is going to be fighting Apple at the high end, while leaving room for Google and Amazon to clean up on the low end.
He writes, "Surface's high pricing could prove to be a fatal mistake and relegate it to be a niche No. 4 or No. 5 player. We believe Nexus 7 and Kindle Fire HD will likely see considerably higher volume given their low $199 price points and stronger ecosystems with iPad retaining its commanding No. 1 position." (He thinks Microsoft should have charged $300 for the Surface plus the cover.)
 
I have to agree that the Surface is priced too high. It's above the price point that I would be willing to pay for a tablet device. For $500+, I would rather have a laptop than a tablet. Not only that, I wouldn't consider the ARM based Surface RT but would want the x86 based Surface Pro model which costs even more making it far more likely that I would opt instead for a laptop.
 

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For the same price as the iPad, you get better specs, MS Office and USB port.
Surface
Quad Core
2GB RAM

iPad
Dual core
1GB RAM

If MS came into this market with anything other than fourth place it would be shocking, this is their first slate/tablet.
For me the price is high for any tablet, with the specs and in comparison with other devices, it is competitive and worth a look.
 

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Some analyst this Shaw Wu character, why not compare 10" to 10" tablets price points, obviously a 7" tablet will be cheaper especialy when sold at cost. How about comparing the Surface RT without keyboard at $499 to the Asus Prime at $449-$499 without keyboard. Let's add a keyboard to the Android 10 tablet bring it to $699 for 32GB which is the price of the 64 GB Surface RT with keyboard. The 64GB Asus Prime with keyboard comes in at over $800!! Microsoft is marketing the Surface as a high quality tablet and it's priced competatively and cheaper (cheaper as in MORE for your money) than the iPad.

No surprise though, typical FUD.
 

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The thing is that the Surface "not the RT" is not really a tablet, it has closer to PC specs with the quad core, SSD, 4GB memory, plus with it's flip out keyboard and a touch screen that tilts up making it even more like a PC but with a much smaller foot print.

Comparing the two is like comparing apples and oranges so why should the price be the same?
 

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While the surface is less like a tablet and more like a PC, it's certainly a tablet style device. At the high end, sure the hardware is more advanced than the iPad...but the iPad has the status symbol intangible that's very hard to compete against.

I too fear that the price is going to be too high for the Surface to really take off. Most people who are shopping for tablet devices are looking for an all purpose web consumption device. They want to watch videos, potentially read books, surf the web, check email and utilize social media. And many either want 1). status symbol of iPad 2). specific apps in the Apple Store or 3). lowest cost device to do the above tasks.

I think enthusiasts will gravitate towards the more useful device...which would likely be the surface, but I think the average joes are going to shop more based on price. Thus, the less than $400 market space.

I don't think many truly believe they can replace a desktop or laptop with a tablet. Those who think they can, have probably not tried...they have just seen what is popular in the market and tablets are #1 right now.
 

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I think it's amazing people find the price too high, tell that to the millions of people who bought an ipad these past few years.


Putting that aside, for the same price, you have better hardware and more storage and better capabilities the ipad can't and won't match.

Even still, if they priced it at 400, it would be Zune all over again. Even though the Zune HD player was a fantastic little device, it came too late and came as something that passed off as a cheap knockoff. But the Surface priced at a head on level with the ipad, it doesn't take too much to sway to a Surface. Better capabilities, better hardware, more storage. That is all.

I also should say, it's like the media has wrote off the several tablet PCs already out there and seem to think the Surface is the ONLY Windows 8 tablet PC out there. Really right now?
 

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I think it's amazing people find the price too high, tell that to the millions of people who bought an ipad these past few years.
iPad owners spend more on the "apple tax" to get the brand name status symbol. They know and realize this. They pay extra for the service they will receive from the Apple Store. They pay extra for the ability to keep consistency across their iPhones, MacBooks and iPad's. They pay extra because they have already bought into the Apple Store and can use previously purchased apps for their phones on their tablets.

People pay more for MacBook Pros and Mac Book Air's simply because they are Apple products. Look at how they shop, they almost always compare the MacBook against the bargain priced PC and quite often these days make the Apple purchase as they now believe "it's worth it".

Same thing goes for Beats by Dr. Dre headphones. People go from either their 1) Free craptastic earbuds or 2). Their $9 Sony flimsies, to $300-$500 headphones because they look cool, people wear them as a fashion trend and they seem them on TV and in movies. They almost NEVER consider the competition or can name any other reputable headphone manufacturer before they have made the decision to spend the extra on these popular Beats headphones. At the price point, they aren't high performing from an audio standpoint. Their bass is exaggerated. But as relatively uniformed consumers, and compared to their previous piece of crap headphones...they think the Beats are great.


Even still, if they priced it at 400, it would be Zune all over again. Even though the Zune HD player was a fantastic little device, it came too late
Many MS products due come way too late. They had a winner with the Xbox. they had a loser with the Zune. Time will tell on the Surface.


I also should say, it's like the media has wrote off the several tablet PCs already out there and seem to think the Surface is the ONLY Windows 8 tablet PC out there. Really right now?
It's the only one most people are even remotely aware of unless they are fanboys of Microsoft. I have a Blackberry fanatic friend who can tell you everything in the Blackberry pipeline....but nobody else knows about any of this stuff.
 

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Some analyst this Shaw Wu character, why not compare 10" to 10" tablets price points, obviously a 7" tablet will be cheaper especialy when sold at cost. How about comparing the Surface RT without keyboard at $499 to the Asus Prime at $449-$499 without keyboard. Let's add a keyboard to the Android 10 tablet bring it to $699 for 32GB which is the price of the 64 GB Surface RT with keyboard. The 64GB Asus Prime with keyboard comes in at over $800!! Microsoft is marketing the Surface as a high quality tablet and it's priced competatively and cheaper (cheaper as in MORE for your money) than the iPad.

No surprise though, typical FUD.

Very valid points you bring up. Let's compare apples with apples (no pun intended) and oranges with oranges. Bottom line, one gets more for their money with the Surface.

Also, can we even put the iPad in the same hybrid class? No. It's a pad, not a hybrid.
 

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The thing is that the Surface "not the RT" is not really a tablet, it has closer to PC specs with the quad core, SSD, 4GB memory, plus with it's flip out keyboard and a touch screen that tilts up making it even more like a PC but with a much smaller foot print.

Comparing the two is like comparing apples and oranges so why should the price be the same?

Hi there

It might look like a PC and to all intents and purposes behave like a PC - however it's being marketed as a TABLET.

Now we all know once you start talking about 700 - 800 USD you can buy TWO reasonably 'specced laptops for the same price.

A tablet really implies a "lower end product" even if it has a faster CPU etc etc.

I just can't see anybody paying this much for that type of tablet --except defectors from "The Fruit Company" who really want to run office apps on their tablet -- Ipads don't do this.

The market is a harsh place --it will eventually decide the final price - whatever the initial marketing people feel the launch price should be.

cheers
jimbo
 

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I don't believe the vast majority of apple buyers are doing it for the status symbol, don't get me wrong, there are a good portion of people that do. I think people buy into apple mostly because compared to what else is out there, apple is better. The iphone is seen as MUCH better than android (android 3-4 bring an exception, but if you know that you don't have an iphone). The ipad is like a giant itouch and for some reason, some imbeciles think it's a perfect PC replacement. But as for the mac, I don't see that as better than Windows. Honestly, a Surface RT can do the job of what most people use it for. I don't deny that people that have macs use it for legitimate needs like Photoshop, but then again, a PC can do the job better for the money. Some people might buy into the mac thinking it is better, but that's a steep price to pay for a fallacy like that.

I've meet a few iphone users that have told me that they know the iphone is really overrated, but it's better than an android. I would imagine given the choice, a Windows Phone 8 might actually be the catalyst to switch. It is definitely better than, and at the end of the day, isn't that what EVERYONE cares about? I also want to say about the mac prices, you can get a comparable ultrabook for those prices, a really decent tablet PC, or even a touch screen AIO PC for that money. I don't know many people with a mac, and I've yet to actually see someone I know consider buying a mac. Windows PCs are what people know. Unless if you're a hipster wannabe with more attitude than cash on hand, no one's stopping you.

And about the Blackberry, I'm not a Blackberry fan and I know what's not going to be coming down the pipeline until early next year. I am a Windows Phone fan and can tell you what will, has, and is about to flood the town. :)

Speaking of knowing what's going on, specifically the Surface, it's being advertised two weeks before launch and can only be bought online or in a Microsoft Store. What happens when someone who's been seeing these commercials of people clicking in and dancing go to their local amazon showroom (best buy) and ask for a Surface? Will they have to use a Windows tablet PC to order said tablet PC online?
 

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For the same price as the iPad, you get better specs, MS Office and USB port.
Surface
Quad Core
2GB RAM

iPad
Dual core
1GB RAM

If MS came into this market with anything other than fourth place it would be shocking, this is their first slate/tablet.
For me the price is high for any tablet, with the specs and in comparison with other devices, it is competitive and worth a look.

Yes it looks good. Better specs it's a plus.

I guess that if they concentrate some extra firepower (like good compatibility with pc/desktop programs) on the x86 surface it can gain reputation quickly.

We all know that the x86 platform has a long history for pc's. It's been around for a long while and many programs are available. If most of those (even older) programs can run on the surface then it's settled for the first place (at least that's how I'll choose a tablet: what can it run?).
 

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Let's see what uncle Tim Cook has to say in the next few days. ;)

He's doing great so far.
 

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