Analyst: Microsoft’s Surface RT tablet priced too high, could be the next Zune

“Microsoft finally announced long-awaited pricing on its Surface tablet starting at $499 and $599 with its innovative cover-keyboard,” Shaw Wu, analyst at Sterne, Agee & Leach, writes via Barron’s.

“Our view on this is mixed. On one hand, this should give breathing room for its hardware partners to price more aggressively. But we believe a key risk is that Surface’s high pricing could prove to be a fatal mistake and relegate it to be a niche No. 4 or No. 5 player,” Wu writes. “We believe Nexus 7 and Kindle Fire HD will likely see considerably higher volume given their low $199 price points and stronger ecosystems with iPad retaining its commanding No. 1 position.”

MacDailyNews Take: With Apple’s iPad mini looming large.

Wu writes, “From our supply-chain checks, we have picked up relatively modest Surface build plans of two million to three million units versus five million to six million for Nexus 7 and three million to four million for Kindle Fire HD. But suppliers we talked to believe this could turn out optimistic as it is not clear what sell-through will be given highly competitive dynamics… We believe its high price points and limited distribution will likely relegate Surface to be a niche player… As Microsoft, Google and Amazon seek to become more vertically integrated combining hardware, software and services, we would like to note that it isn’t easy to deliver a similar or higher level of quality and seamless integration as Apple… Microsoft attempted to do so with the Zune in MP3 players and Kin in smartphones, both of which didn’t turn out too well.”

Read more in the full article here.

MacDailyNews Take: Ballmer T. Clown. We like his “strategy.” We like it a lot.

[Thanks to MacDailyNews Reader “GetMeOnTop” for the heads up.]


  1. Too high? Don’t you think that iPad is expensive? Actually, Surface is entire PC not just freaking tablet. Price point is relatively cheaper. Apple is just failed. Now, it turned out that apple was wrong.

    1. “Apple is just failed.”


      Surface is, in fact, entire PC. That is why I think it competes with ultrabooks, not really with tablets. The iPad is a tablet that has been selling quite well. You might not know that with your head lodged where it is.

      1. @Edward
        Surface isn’t even out yet after being introduced 2 months ago. The 1st version is RT & does not run any Windows PC programs. Intel Win 8 Surface might not ever be launched if RT bombs, which it will. All these PUFF articles on Surface and nobody has even seen or used one yet.

    2. The surface that’s a PC has not yet been announced. The Surface that’s for sale now is just a tablet. Wen the PC Surface is released you can be sure it’ll cost even more.

      1. +1

        even the PC lovers are confused!
        talk about the shat load of trouble msft has…
        even it’s most ardent fanatics don’t know what is going on.
        wait until clueless PC loving execs who pre ordered try loading their LEGACY DESKTOP excel onto it and can’t and PC gamers try loading their PC games onto it…
        “what the fuk, I thought it was a COMPLETE PC?”

    3. Amazing how some people just take in all the BS no matter how thin it is on facts. We do not yet have a price for the ‘full’ PC version but its going to be high well above present true tablets most likely. And of course all that is is a mock netbook with a bit of tablet bolted on a bit better than the failed existing PC tablets that have failed for a decade rehashed and rebranded. It will be heavy, bulky and sub laptop with appalling battery life that can’t compete with tablets at what they are good at nor laptops at what they are good at. Meanwhile we have RT which many think is a real PC but which is in reality just another tab with average screen, weird interface and no apps. Spin really can only fool some of the people some of the time or the Zune would be King.

    4. Surface RT doesn’t run Windows applications, you have to buy new apps. Surface Windows 8 can’t possibly run with any speed, and you’re only going to get 32 GB of storage? Windows has to take up 20 GB alone or more, and Microsoft Office has to be 1-2 GB. Good luck with that POS running well.

      1. I gotta ask, does POS mean point of sale or piece of shit?

        Seriously though, Surface Windows 8 will be a blast. Watching a movie when the fan starts up will be a real Sound Surround moment.

    5. @Edward:

      #1 This article is talking about the Surface RT, which is ARM based – it won’t run “PC” software AT ALL.

      #2 Actually it turns out Microsoft was wrong for the last decade when it tried to shoehorn Windows onto tablets. It failed miserably. And Surface Windows 8 is nothing more than a netbook with a touch screen. Where are netbooks now? Exactly. It will fail as well.

      Sorry, but Apple was right, not wrong, when it comes to what people want in a tablet.

    6. People….. Please don’t feed the “Edwards”….

      Like any dumb animal, if you feed them they will keep returning… Unless your plan is to trap and eliminate them like the pests they are it is best to just make sure to give them nothing to sustain their appetites for garbage. Ignore them and they eventually go away.

  2. Funny how some people seem to think the iPad & Surface are expensive. The price seems about right to me. The interesting thing is that at these prices Apple is making money, and Microsoft is most certainly losing money.

  3. Hey. We need to encourage Ballmer T. Clown. He should order 5 to 10 million for the Christmas rush. These could replace coal in the Christmas stockings. Think bigger and encourage our little dancing monkey. Ho Ho Ho!

  4. You have to love analysts. They make judgements with partial or incomplete data so often these days especially with technology it makes you wonder why they bother. Here’s a few thoughts:
    Not everything has to be compared to the iPad first of all and there’s no comparison directly with the Kindle or the Nexus 7. Those devices are direct extensions of their parent company’s services and are primarily consumption devices.
    In the tablet arena, the Microsoft RT device compares well with 32GB of memory as the starting amount and Microsoft will be competing against a multitude of competitive devices from other makers. We will see great deals on Windows tablets beow the $499 starting price.

      1. :). It isn’t quite THAT huge, but it is right at about 11.5 GB. Which is still amazingly bloated for a “mobile” operating system. But hey, this is MS, bloat is what they do best.

  5. “We believe Nexus 7 and Kindle Fire HD will likely see considerably higher volume given their low $199 price points

    DUH yeah! They’re sold at BELOW COST!

    I will NEVER understand why TechTard journalists NEVER (well, almost never) point out that this strategy is for BUYING MARKET SHARE! Hello!

    What the hell good is a SUBSIDIZED product within a business market, apart from faking competition in order to hurt would-be competitors?

    IOW: FRACK the subsidized OtherPads! What are the REAL competitors doing in the market place? HMM?

    How about we toss all the subsidized OtherPads on the bottom of the list sheet under the category of ‘Pathetic’? We know damned well they would NOT sell well if they had a realistic price.

    1. They’re tech journalists because they can’t make it in the business world. That’s why they think market share is king, low price means gigantic sales ahead, and that people shop based on price or spec sheets alone.

  6. Why would anybody except Edward pay $499 for this train wreck, when for the same price you could get an iPad? Oh wait, I know, for the extra 16GB of memory that you will need to load office and its patches.

      1. Yeah, when your “32GB” tablet only has about 20.5 GB free right o of the box, you know that you are going to be in trouble once MS starts updating and rolling out new versions of the OS.

  7. Don’t worry- this time next week (E)edward, Chris, iSS, Goopta, and all the other shithead trolls will be gone and back in their holes never to be heard from again, as they will have nothing further to BS us with.

    1. LOL Don’t forget Pat & Gary….

      We can hope they will be gone, but they will be back spewing more FUD, conspiracies, half-truths, and outright lies that slander Apple and glorify SameDung and the others

      At least they they encourage us to brush up on Apple and tech history, and to develop or hone some higher reasoning skills.

  8. But but but but it has pretty colored squares on the screen. How can it fail? They must have spent billions on developing those pretty colored squares. Billions I tell you.

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