Supply chain estimates x86 Surface Price at US$500-700 and RT below US$399

Aaron Lee, Taipei; Joseph Tsai, DIGITIMES [Tuesday 18 September 2012]

Microsoft's own-brand Surface tablets are expected to launch at the end of October with the related supply chain players estimating that the Surface RT's hardware cost is at around US$300-400 and the end price will be less than US$399. However, the pricing is not confirmed by Microsoft.

Microsoft's pricing strategy for its own-brand tablets will relatively affect PC brand vendors' pricing strategy and sales projections for their Windows 8 tablets. As the launch time at the end of October is approaching, PC brand vendors are keeping a close eye on Microsoft's actions. With the related Surface pricing speculations having been floating around the market, Surface RT was previously rumored to be priced at only US$199, leaving the PC brand vendor in a cold sweat.

Since CEO Steve Ballmer in a recent interview pointed out that a price level between US$300-800 will be the sweet spot for PC sales, some market watchers have interpreted the statement as a hint for Surface pricing.

The sources revealed that the hardware cost of Surface RT is at US$300-400 and US$400-500 for the x86 version. Since the devices will not need to pay the licensing fee for the operating system. The RT version will be priced below US$399, while the x86 version is estimated to be US$100-200 higher based on hardware costs and priced at US$500-700.

The PC brand vendors also pointed out that they will not be absent from launching x86-based Windows tablet products since Windows still has leadership position in the global enterprise market. If the x86 Surface's end user price is at US$500-700, although they will feel the pressure from competition, the product line would still be profitable.