The main reason behind the tablet’s lukewarm reception is probably the price. Surface basic unit comes at a price tag of 499 dollars and with the keyboard cover, price starts at 599 dollars (yes, hundred dollars for that keyboard cover). One thing that many don’t know is the actual price of parts that make up Surface tablet.
The market research firm, iSuppli has given us a breakup of parts that go into Surface. Here are the parts and prices for an estimate of the profit margin.
The Part
|
The Price
|
Memory (2GB DDR3L +32 GB eMMC) NAND Flash & DRAM
| $34 |
10 inch display + touchscreen
| $101 |
Nvidia Tegra 3 Processor
| $21.5 |
Camera (1Mp rear & front)
| $5 |
User Interface, sensors, & Combo module
| $20 |
Power management
| $8 |
Li-Polymer Battery (31.5 Wh, 7.4 V)
| $20 |
Mechanical & electromechanical parts
| $36 |
Box contents
| $25 |
Total Parts cost
| $270.5 |
Manufacturing
| $13 |
Parts + Manufacturing
| $283.5 |
Price for which Surface is sold
| $599 |
Surface starts at the 32-GB model and it is priced at 499 dollars. Here is a price comparison of Apple iPad and MS Surface.
| Tablet | The Edition | The Price |
|---|---|---|
| Apple iPad | iPad 16 GB Basic | $499 |
| 32 GB | $599 | |
| 64 GB | $699 | |
| Microsoft Surface | 32 GB tablet only | $499 |
| 32 GB with black touch cover | $599 | |
| 32 GB with cyan, red, magenta, or white touch cover | $618.99 | |
| 64 GB with black cover | $699 | |
| 64 GB with touch cover in other colors | $718.99 |
Apple iPad, the fourth version comes at prices comparable to
For one thing, Surface with Windows RT will not work with any Windows application you have been using with Windows XP or Win 7.
Surface. However, Surface Pro tablet to be released soon may come at least 70 dollars more than iPad.Price of Surface is such a big gamble by Microsoft indeed. For one thing, Surface with Windows RT will not work with any Windows application you have been using with Windows XP or Win 7.
It is a purely ARM-based tablet (similar to iPad or Android tablets). It is not a PC, just a tablet, that is!
Surface Pro on the other hand is exactly a regular PC and can work with other Windows applications.
Surface with RT has a limited number of apps available in the Microsoft app store, and the asking price is too high. The hardware given is not an improvement either. With such a huge profit margin as we saw, Microsoft could go with a smaller price tag for Surface, and they did not.
A tactic that companies have found useful is setting a high price for a product in order to make it look like a high-value, high-quality product—a strategy that Apple has successfully implemented for years. However, Microsoft’s reputation is sadly not right for that kind of a stunt.