According to Chris Whitmore, an analyst with Deutsche Bank, the new Microsoft Surface Tablet will have a major uphill struggle against Apple's iPad. In his analysis he indicated that Microsoft is "grasping at a competitive response," and will have a "major dilemma" when trying to price the new Suface competitively against the iPad. He does a cost breakdown analysis with projected parts costs for the components and manufacturing between the two tablets, and things look somewhat bleak for Microsoft if his figures are correct.
Based upon his estimates, Microsoft and their partners will need to price their tablets at about $650 in order to keep a gross profit margin of just 20%. This is well below half of the 44% gross profit margin that Apple has with the iPad. As you can see from the middle column of the chart above, for Microsoft to compete on a level profit margin with Apple, they would have to sell the Surface at $820 for the RT version.
The Pro version of the tablet will not even compete directly against the iPad and is more likely to go up against ultrabooks and the Macbook Pro. Still, Whitmore believes that the Surface Pro will actually find better success than the RT version because it is more likely to be adopted by IT departments in the Enterprise market. This will slow the adoption rate of iPads into that market segment. Here's a quote with additional details,
What do you think of this analyst's predictions?
If you are curious about the competition's new tablet, or just like all technology in general, head over to our sister-site @ Microsoft Surface Forum.
Source: SurfaceForums.net via AppleInsider
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