updated 07:53 pm EDT, Fri August 17, 2012
Tablet could hit low price point with subscription
Microsoft may build around three million units of its Surface tablets for this calendar year according to an estimate from market research company IDC. The research firm spoke with CNet about Microsoft's forthcoming tablet, explaining that that total includes both the Intel and ARM versions of the device. The firm also opined as to rumors that the Surface might debut at $199, offering a novel pricing model that has not been discussed too widely.
Making several million Surface units would almost certainly guarantee that Microsoft will partner with wider retail distributors in order to get its tablet into the hands of consumers, as it is too high a production run solely for distribution through Microsoft's retail outlets. The company has yet to reveal much in the way of the marketing and availability of the device, but persistent rumors peg its price at a $199, half the going price for Apple's iPad 2.
IDC believes it is possible that Microsoft could price the Surface in such a manner, but that wouldn't be the only option to get the tablet. The research firm believes the $199 price would be offered in conjunction with a two-year subscription of the sort seen with smartphones and cellular carriers. Microsoft could get the device into customers' hands at an attractive price point and amortize the production cost over the life of the subscription. IDC also believes the company would offer a way to buy the device outright for around $599.
Microsoft has previously shown the willingness to adopt a subscription model to grow market share. Earlier this year, the company began offering its Xbox 360 game console with the Kinect attachment for $99. The bundle deal was available with the activation of a two-year, $15-per-month Xbox Live Gold subscription. Customers purchasing the bundle would, over the life of the contract, pay $460; $40 more than if they had bought the hardware and Xbox Live subscription up front.