Earlier today we reported on rumors that put the pricing of the Microsoft Surface RT tablet at a mere $200. This is the same price as an 8GB Nexus 7 and the Kindle Fire. While many think this is a good price point for an entry level Windows 8 tablet, could Microsoft be making a big mistake in the eyes of its hardware partners? So far, the company has kept tight wraps on which OEMs are allowed to create Surfact RT tablets. HTC was flat out denied the possibility.
Earlier in the month, Acer CEO JT Wang expressed several concerns about the Surface, saying Microsoft should “think twice” about their strategy. Was he referring to this $200 tablet? Microsoft is a large enough company that it can afford to sell tablets almost at cost, similar to what Google has done with the Nexus 7. They want Windows 8 tablets in as many hands as possible, so they’re willing to undercut as much as possible. This leaves absolutely no room in the market for OEMs like HP and Dell who may be looking to step into the Windows RT arena.
It’s possible that Microsoft wants to control the OEM distribution of Windows RT in order to prevent OEMs splitting from the company over the issue. If the company can say, “You weren’t an approved partner” anyway, then arguably any OEM who is upset over the low pricepoint has no leg to stand on. Analysts believe the move is a bad idea, even if it will get consumers to pay attention to the Windows tablet ecosystem. Sarah Rotman Epps, a Forrester Analyst, believes the move is a terrible one:
“In one fell swoop, they would handicap their partners, and it would prevent them from releasing higher-priced products. That pricing would be suicide. Nothing about that strategy makes sense.”
What do you think? Is Microsoft making the right move if this rumor is true? Would a subsidized tablet in this market still leave room for other OEMs to market their products?
[quote via Wired]