Nick Wingfield of the New York Times explores Microsoft’s sticky wicket: how to price the Surface tablet:
“When Motorola introduced its Xoom tablet, based on Google’s Android operating system, early last year, it priced the cheapest model without a wireless contract at $800. It steadily discounted the Xoom after that, but it never caught on.
The cheapest PlayBook from Research in Motion, maker of the BlackBerry, was the same price as the iPad. It, too, fizzled and is now on sale for as little as $199.”
“One big expense for Microsoft’s PC partners traditionally has been the licensing fee they pay for Windows. Microsoft could, in theory, forgo those licensing fees to itself with Surface to offer a cheaper tablet.
But that would create another problem for Microsoft. If it took that path, the company might undercut its license-paying hardware partners, making it difficult for any other company to get traction in the Windows tablet business.”
I’m so interested to see how Microsoft will price these things. I assume it won’t make the mistake of “chasing Apple” again, having learned lessons from the Zune’s failure. The Surface’s potential is compelling.