updated 11:16 pm EDT, Tue August 14, 2012
Similar amount 'subsidized' by Microsoft for Xbox 360 at launch
A briefing allegedly held at the recent Microsoft TechReady 15 conference in July has fostered reports that the Redmond giant may launch the Microsoft Surface family tablet">Windows RT-based Surface tablet on October 26 in parallel with Windows RT (the ARM-chip version of Windows) and Windows 8, at a market-leading price of $199, forcing Microsoft to take a loss on every tablet sold.
The move, if accurate, puts the Windows RT tablet in a similar position to the Xbox 360 at its launch. Presumably, in an effort to "buy marketshare," the tablet could be sold at a steep loss -- with follow-up sales of accessories and applications making up the difference between the unit construction cost and the retail price, reports Engadget.
The ARM-based Windows RT version of the surface appears to be aimed directly at the iPad, sporting a 10.6-inch display and a 9.3mm-thick magnesium chassis that helps keep the weight down to 1.5 pounds. The display on the ARM-based model is expected to be 1280x720 resolution, lower than that of the Intel Ivy Bridge i5-based Windows 8 Pro version of the Surface.
A current-generation iPad with Retina display is estimated to cost Apple $316 for the low-end 16GB version. Downgrading the display to the 1280x720 display on the Windows RT version of the Surface tablet and increasing the memory to 32GB reduces the cost to about $300. Assuming similar construction costs, Microsoft selling the WiFi-only Surface tablet at $199 would then cost Microsoft $101 per unit sold, a similar amount to the $126 per Xbox "subsidy" paid by Microsoft during the first year of the Xbox 360 launch. If the tablet launches for $199, Apple's similarly-configured iPad 2 at current retail price costs twice as much. The actual cost to Microsoft per unit could be much higher since costs like distribution, advertising, software and other expenses aren't included in the estimated bill of materials.
Windows hardware partners are already expressing concern about Microsoft's entry into the tablet market, with Acer CEO J.T. Wang asking them to "think twice" about entering the market. Wang calls the Surface "negative for the worldwide ecosystem" and wonders what other alternatives there may be to future operating systems on non-Microsoft devices if it can't compete. Other companies like Dell and Gateway claim to still be releasing Windows 8 devices, including tablets, when the new OS launches. Microsoft is reportedly working on the next generation of the Surface tablet line, even though it had previously told partners that the Surface was a one-off intended to showcase Windows 8. [via Engadget]