“An anonymous source has told Engadget that Microsoft’s ARM tablet, the Surface RT, will cost just $199 when it goes on sale on October 26th,” Peter Bright writes for Ars Technica. “Microsoft would be making a loss on every unit sold. Still, Microsoft could afford to sell Surface RT for $199. There are reasons why it might want to do so, and there are even realistic ways in which it could make up for that loss. But the negative effects of such a price plan would be enormous.”

Bright writes, “The downsides are numerous. Microsoft’s relationships with OEMs are already strained as a result of Surface. Acer, in particular, has been vocal in its complaints about Microsoft muscling in on the hardware market. A $199 system would give the company’s hardware partners no room to manoeuvre, forcing them out of the Windows RT market as soon as [make that “before” – MDN Editor] they’ve entered it… With no means to effectively compete with Microsoft, other tablet manufacturers would likely switch to, or stick with, Android.”

“Bad blood in tablets could have a knock-on effect on the desktop and laptop market, too,” Bright writes. “Windows 8 is already a contentious release thanks to its numerous user interface changes. It’s not likely that the OEMs are going to switch to Linux any time soon for their conventional PCs—but they could respond to doubts about the new operating system, especially among enterprise customers, by continuing to push Windows 7 even once Windows 8 has been released, and fueling the perception that Windows 8 just isn’t cut out for conventional computers.”

MacDailyNews Take: Imagine if Apple then executed a controlled licensing program (Apple approval required) of OS X to interested parties. OS X is now just a fraction of Apple’s revenue stream, yet it is the only serious alternative to Windows. Apple no longer needs OS X exclusivity to survive. By licensing OS X correctly and at this crucial time, Apple cause extensive damage to Microsoft and Windows.

Bright writes, “Perhaps the most significant reason of all not to price Surface RT at $199 is that once that decision is made, there’s no going back. The price of a 10″ Windows RT tablet will be two hundred bucks—or less—forever… The results [of a $199 10″ tablet] for Microsoft and the PC OEMs alike would be nothing short of a disaster.”

Read more in the full article here.

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