After watching the video of the announcement about the new Surface tablets and comments by other users I wanted to add my thoughts to the discussion.  Balmer stated that sales of the surface tables will only be a small percentage of tablet sales.  I personally think that how the Surface tablets sell will be a big indicator on how successful Win8 is going to be on tablets (Unless MS overprices it).  This is similar to how people will look at Nokia WP8 phone sales as an indicator on how successful WP8 will be.

Partners / Pricing

Microsoft has set the bar for it’s hardware partners for what users should expect from a Win8 based tablet. I do realize MS has a very fine line they have to walk to keep hardware partners happy. On the other hand if they overprice both Surface models they will not sell many and the Surface tablets will be seen as a big failure. 

Surface:  This is the ARM based tablet.  There is speculation that this will be priced similar to the iPad.  I think that this would be a mistake. In a lot of ways this tablet is comparable to the iPad, but it lacks just enough features to not be able to be a compete against the iPad.  This does not have to be priced as low as a Kindle Fire, but it cannot be a high as an iPad either. Below are the negatives I see at this time

• The main reason is that there will not be a lot of WinRT applications for the device when it is launched.
• No Retina display.  Although it does have HD display it is not close to the Retina display.
• Most developers are waiting to write applications to see how the new Win8 tablets sell, since time is limited and no one wants to spend time writing applications for a limited customer base.
• Not having the Stylus and Palm block on this devise.  If the hardware will support it, MS needs to try to get this feature on both by launch. There are many business users who would use this feature to take notes in meetings, write documents, etc. These business user shouldn’t have to buy Pro version for this feature.
• The rumor that the ARM version will not be able to connect to a domain. If true, this would be bad be bad because IMO a majority of business users do not need the Pro version to check emails, write/read office documents, take notes, calendar, contacts, blogging, browsing internet, etc.

Surface Pro: This is the Intel-based tablet.  This looks really nice, but pricing based on the Ultrabooks  would be a mistake because at this time Ultrabooks range from $800 – $1,400.  These are not ultra-books, these are tablets (no 500GB+ HD, No DVD, etc.), so they would be overprices if MS uses ultra-books as the basis for pricing.  IMO the 64GB version could be priced similar to the iPad 3, and MS could justify a little higher price for the 128GB version.  If they had a 256GB and/or 512GB version then they might justify the price approaching high end ultra-book prices. The fact that these tablets will run all Win7 applications eliminates the “lack of applications” argument, thus another reason it is good iPad competitor.

Price Comparison

So here is what I think the pricing should be for Surface to be successful (based on the table above)

• Surface 32GB: $300-$350 (Galaxy)
• Surface 64GB: $400-$450 (low end iPad)
• Surface Pro 64GB: $500-$600 (high end iPad)
• Surface Pro 128GB: $600-$750 (i5 laptop)
  
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• Surface Pro 256GB: $800-$900 (low end ultra-book) – Sadly, this option does not exist for Surface Pro version.
• Surface Pro 512GB: $900-$1,000 (high end ultra-book) – Sadly, this option does not exist for Surface Pro version

Conclusion

I personally am very excited about the surface tablets and planning on getting one.  But if MS is to worried about appeasing OEM’s they could price themselves out of the market before they even have a chance.  I for one am hoping MS prices these to sell a lot of them, and there is a huge advertising push to sell both versions of the tablet. Otherwise a year from now the Surface could be seen as another MS failure to gain any traction in the tablet market.  I’m not saying MS has to get ahead of either Apple/Android, but they do need to get a respectable share of the market (15%+) pretty quick and the Surface tablets should lead the way and set the standard for all tablet makers. If overpriced the Surface tablets could be on the same list as MS Bob and Kin as epic failures. 

If overpriced there will be no incentive to buy the Surface tablets, and a better option would be to get an iPad, jailbreak it and then install Win8  on it. According to my cousin who is an Apple fan boy, “Win8 on tablets kicks Apples butt and is so much better than iOS”.  My interpretation is “Win8 makes the iPad better (great hardware with even better OS)”. MS and OEM’s take note, we need quality Win8 tablets  at a reasonable price.  Remember price it right and we could see 1-2 million sell the first couple of months as opposed to selling 1-2 million all year.  Sometimes profits come from selling large quantities and making smaller profits per device, instead of selling a smaller number of devices at a higher profit.  For all tablets (surface and OEM devices) selling a large quantity is important because without millions of devices out there, developers will have no incentive to spend time writing application for Win8 based tablets.