Microsoft Has a 'major dilemma' Pricing The New Surface Windows Tablet vs. the iPad

Discussion in 'Apple iPad News' started by dgstorm, Jun 26, 2012.

By dgstorm on Jun 26, 2012 at 1:56 PM
  1. dgstorm

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    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: via AppleInsider


Discussion in 'Apple iPad News' started by dgstorm, Jun 26, 2012.

    1. biobunny
      When the iPad came out, people said it was too expensive as well.

      Sent from K48
    2. biobunny
      Couldnt edit my post for some reason, sorry for the double post but ignore my first comment.

      Sent from K48
    3. dgstorm
      nice point biobunny!
    4. logcrier
      Keep in mind that the OS in the list is not COST for microsoft, but Revenue/Profit. So basically they have bandwith to lower profit on the hardware. And also... they do not plan to stay in hardware for long time. They try to tickle their hardware partners to comeup with more innovation and then leave the hardware market themselves, making their profit entirely on the OS again and patents.
    5. thewitt
      Microsoft will struggle, it not fail totally, in the consumer market. The most likely place they will see success is the wired, industrial market. An intel based tablet with only 4 hours of battery life weighing 2.5 pounds is not going to thrill the mobile user at all.
    6. Kaykaykay
    7. Kaykaykay
      By the way, there's been lots of speculation about battery life, but the speculating based on what looks like reasonable measures has been seven to eight hours. Lots of stories online. Here's one:

    8. followthesapper
      Why do you say that? The battery life is only speculation at the moment as is the price. I agree it will be a bit hefty compared to the iPad, but it's not that bad.

      If you look through this and other forums for iPhones and iPads, what's the number 1 question asked by noobs?

      How do I use MS Office?? documents etc. The surface will have this as a native app. (I don't believe we will see an iOS version for a long time yet imho)

      That and the easy integration with home pc/laptop may sway any new tablet consumers towards Win8..
    9. HKey_Current_User
      Throw in the corporate world that has never embraced Apple, much less the iPad, and suddenly the Surface has a decent potential market.

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