Why does Microsoft NOT pull a Nexus, afraid to hurt its partners, canibalise office ?
I don't understand the reasoning behind Microsoft pricing the surface at $450 - $500 without touchcover.
Sure it's a great piece of hardware engineering and on materials and functionality it's probably the best tablet in the world and should cost even more.
However it's most difficult to convince the consumers of that in an already saturated market where all devices do more or less the same thing and where Microsoft's image is less than stellar for a multitude of reasons. Hence a biased, heavy handed media playing along to their readers expectations, conditioning consumers and this effects developer interest.
Is it truly better to try and sell said device at above the $500 mark with a decent profit margin on top, go on to order too many, not sell enough and have to write off a billion ? This was of course followed by receiving a horde of 'RT' flops, makes losses etc. Headlines the world over, effectively putting a truly great products survival at risk. Why not sell the thing at near cost price for the first year or two to amass users and ecosystem respectively ?
I believe if the first Surface RT came out priced at $298 with a $39 touch cover we would have never gotten those nasty headlines regarding the write down and at the same time Microsoft would have added millions of more users to the ecosystem. Where's the logic ? All I see is greed to make money faster and sell a cake before it's fully baked.
What's more interesting is that they decided to stick to the old price strategy going forward.
Wouldn't it be great if we got the following this year, especially knowing that all OEM's put Windows RT on the back burner, it wouldn't hurt anyone:
Plastic Surface: $199 with weaker SOC (Office can be activated for $49)
VaporMg Surface $295 (Office can be activated for $49)
VaporMg Surface with BayTrail: $399 (Office can be activated for $49)
Basically Ms needs to price f**k the market with Windows RT. Heck, even lose 1 billion, but not on a write down, but on subsidising own devices and getting millions of new users into the ecosystem. If you try to compete moderately and be reactive to your competitors price and product strategies you are going to burn, you have to turn the market on its head and get noticed to win. What's losing a pesky couple of billion for Ms in order to get a viable ecosystem and user participation pool. Of course I am not suggesting Ms subsidise own devices and lose money, but that would still be a helluva lot better than writing off a billion for the things not selling.