Microsoft faces ‘major dilemma’ pricing Surface tablets against iPad

“In order to compete with Apple’s iPad, Microsoft may have to price its Surface tablet models so low that it will alienate its longstanding PC partners, according to a new analysis,” Neil Hughes reports for AppleInsider.

“Chris Whitmore with Deutsche Bank doesn’t have high hopes for the Microsoft Surface tablet lineup recently unveiled by the company,” Hughes reports. “In a research note provided to AppleInsider on Monday, Whitmore said he feels Microsoft is ‘grasping at a competitive response,’ and he believes that response will fall short of competing directly with Apple’s market leading iPad.”

Hughes reports, “In particular, he feels Microsoft has a “major dilemma” in how it will price its Surface tablets. For the low-end ARM models running Windows RT, he believes Microsoft will have to undercut the iPad on price to find any success. But in doing so, Microsoft could make it impossible for its Windows partners to compete… As for Surface “Pro” tablets running the full Windows 8 operating system, Microsoft has said those devices featuring traditional Intel processors will be priced comparable to Ultrabook notebooks, which usually cost around $1,000. Whitmore noted that Surface tablets running Windows 8 will carry a 20 percent premium over the high-end 64-gigabyte iPad with 4G LTE, and they will likely have worse battery life, fewer third-party apps and a thicker form factor.”

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