Opinion: Microsoft’s Surface tablet, priced to fail

Posted on Oct 17 2012 - 3:11pm by Mike Wewerka

By now you’ve already heard the pricing structure that Microsoft released for their upcoming Windows RT tablet, Surface. If not, let me break it down before I get all judgmental. The first thing you need to keep in mind is that this is a tablet, a 10-inch tablet, that will compete in the same market space as Apple’s iPad and Samsung’s Galaxy Tab 10.1..

First off, the tablet will sell with three price levels, starting off at $499 with 32GB of storage, next is the same model, but for $599 (yes, $100 more) you get a black Touch Cover and finally for $699, you get a 64GB model and a black Touch Cover. For those of you who are unfamiliar with the term Touch Cover, it’s basically like Apple’s Smart Cover, as it acts as a removable cover for your tablet, but with Microsoft’s version, it doubles as a soft touch keyboard as well. Is it worth the extra $100 ($119 if bough separately), not really, at $59, maybe. If the Touch Cover isn’t your bag, you can opt for the Type Cover, for $10 more (at $129). The Type Cover has physical keys that can be pressed down, giving users a more realistic feel.

Okay, with that all out of the way, let us look at what Microsoft is selling you, the general public. 32GB of storage is great, but with so many things moving to the cloud and movies and TV shows available to stream, 16GB of storage isn’t really a deal breaker and remains the best selling iPad model, so while it’s nice to start off at 32GB, it’s not a must have feature. When it comes to other tablets that competitors have priced at the same point as the iPad, they haven’t fared so well. Just ask Samsung, who’s even admitted that they haven’t been doing that well in the tablet market. In fact, other than the Kindle Fire and the Google Nexus 7, no other tablet has even come close to matching the iPad’s success and those successes have been mainly due to their low price tags. So with Microsoft pricing their inaugural tablet at the same price point as the iPad, which features a Retina display and that massive iOS/App Store eco-system, not to mention the literally thousands of accessories, which include keyboard/cases, which sell for less than Microsoft’s Touch Cover/Type Cover, it’s hard to see the Surface’s selling points, other than it’s another fresh face on the shelf.

The other thing Microsoft has to sell, is the fact that it’s a Microsoft product. Most people buy PC’s because they are cheap or play most games (unless you’re a business than it has more to do with software), while people who buy Mac’s, buy them because of the quality of the device and the ease of use. Microsoft still has a bit of that stigma of being the bad guy or blue screen of death company, despite what hardcore fans think. Regardless of how great Windows Phone is (and yes, we do think it’s great) it has been having a hard time catching on with customers for several reasons and those reasons are the same that will prevent people from buying the Surface.

Those reasons are:
1.) Lack of dedicated apps – While companies like eBay, Netflix and Skype (which is now owned by Microsoft) have made Apps for the Surface (or Windows RT) companies like Rovio, who sell millions of apps in a weeks have yet to port games like Amazing Alex and Angry Birds Space to Windows Phone, let alone Windows RT. Since Angry Birds Space was released, Rovio has put out Bad Piggies and will soon release Angry Birds Star Wars, more big sellers Windows RT won’t feature . Where’s the Instagram support? These are just two examples, there are literally hundreds of big app developers that haven’t jumped on the Microsoft bandwagon. Just how Windows Phone suffers from app withdrawal, so will Surface, until customers buy it, but sadly, the Surface could find itself in the same catch 22 or chicken and the egg scenario… if customers don’t buy it (in droves) then developers won’t support it and if developers don’t make games, customers won’t buy it.

2.) Unfamiliar Interface – Despite the fact that Windows Phone and Window 8 look very simplified and are actually quite easy to use, some customers may find it a bit confusing or “to simple.” Early reports are already showing that customer who have been shown Windows 8 tend to be a little lost and confused. Microsoft has taken something, that while not perfect, has worked for millions of people, non-technies to be specific, and not only changed it up, but did so drastically. This may cause some folks to choose iOS, which has been proven to be easy to use, so easy in fact, that a baby or even a monkey can operate it. Then there is also Android, which offers a straight up experience similar to standard PC hierarchy and operation.

3.) Cost of the device and lack of accessories – While the price isn’t more expensive than the iPad, it doesn’t offer the same amount to the consumer for the requested amount. Consumers love accessories and sadly, the Surface won’t be able to compete on the same level as the iPad for many months, if at all. So when a customer is told that the iPad (a name they are already familiar with) is $499 and features over 700K apps and has literally two walls of accessories, then are shown the Microsoft Surface, which is also $499, has about 100K apps or programs or less, comes with a case/keyboard “if” they spend $100 more and that’s about all for accessories… it’s not hard to see why Apple continues to win.

If Microsoft really wants Windows RT tablets, the Surface to be precise, to succeed, the first step to drop the stupid licensing fee or lower it. Second, drop the device’s price, they’re not Apple and can’t demand the same high profit margins when they come to the game almost three years late. They need to undercut Apple, much like Amazon did with the Kindle Fire, but aggressively with a 10-inch tablet. They need to start the device off at $350 and go up from there, adding extra storage means squat to a consumer who can store their content in the cloud, stream movies and TV and can re-download apps any time they want, as I said, it’s not a deal breaker.

As it stands, the Surface is not priced to sell, it’s priced to fail. Sure they’re going to sell a few in the beginning to diehards, just like Samsung did with the Galaxy Tab and ASUS did with the first Transformer and Google did with the Nexus 7, but when the novelty wears off and it’s not new anymore (or when Apple releases a 7-inch iPad which is cheaper), it will be left on the shelf, as the iPad continues to sell circles around it. Unless Microsoft gets more aggressive with pricing and lures in more developers, the Surface will suffer the same slow growth, if at all, as Windows Phone, despite being a fantastic product with a slick, smooth interface.