Microsoft Says No to Bargain Bin for Surface, Aims to Fight iPad Head-On

By Michael Comeau  OCT 16, 2012 12:25 PM

Microsoft is pricing its Surface tablet in-line with Apple's iPad.

 


MINYANVILLE ORIGINAL

Holy s--- we're head to head, I can't believe we're doing this.
-- Goose, Top Gun

Ever since Microsoft (NASDAQ:MSFT) unveiled its Surface tablet back in June, both investors and tech shoppers have wanted to know: How much is this thing gonna cost? (See: With Surface, Microsoft Stands Little Chance of Competing With Apple in the iPad Market.)

Investors wondered, would the Surface end up in the bargain bin with the Amazon (NASDAQ:AMZN) Kindle Fire HD or Google (NASDAQ:GOOG) Nexus 7? (See: Amazon's Kindle Fire HD Is a Menace to Android and a Friend to the iPad.)

Or would it try the high end of the market? You know, the profitable end where Apple's (NASDAQ:AAPL) iconic iPad has taken all of the lunch money from Hewlett-Packard (NYSE:HPQ), Research In Motion (NASDAQ:RIMM), Motorola, and Samsung.

We now know that Microsoft is taking the latter route, as its online store temporarily leaked pricing for the Surface with Windows RT.

According to The Verge, it goes as follows:
So is Microsoft in the game?

First, let's go over Apple's obvious advantages in the tablet marketplace:

1. It is the coolest mass-market brand on planet Earth.

2. It has by far the best app ecosystem.

3. The iPad has the best combination of usability and sexiness of anything on the market.

And let's outline Microsoft's disadvantages:

1. It consistently plays follow-the-leader with Apple products, opting to copy instead of leapfrogging, and that sends out a terrible message to consumers.

2. Outside of the Xbox, Microsoft's gadgets (Zune, Kin, Windows Phone) have been flops.

3. The brand has enormous baggage from so many bad versions of Windows.

4. There is no incentive for anyone who has put money into native Apple iOS or Google Android apps to switch.

Now, the cheapest version of the new Apple iPad is $499, which includes 16 gigabytes of storage. Microsoft throwing in an extra 16 gigabytes of memory for the same price is an absolute non-factor.

You can see where I'm going with this. We won't know the final word on the Surface line until it's actually out in the wild, but I've seen nothing in preliminary reports to indicate that there's any reason to buy a Surface over an iPad -- especially when they're running at roughly the same price.

And if Google Android -- a vastly stronger brand than Windows -- hasn't been able to make inroads into tablets, how can we expect Microsoft to break through?

On top of all this, think about what's going on with the iPad Mini. It doesn't even exist, yet it's getting vastly more press than anything Microsoft is doing.

What does that tell you about the state of the world?

(See also: Tech News: Microsoft Leaks Prices for Surface RT and Surface Tablet Likely to See Minimal Holiday Sales, Says Analyst.)

Twitter: @MichaelComeau

Position in AAPL.

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