Yes, Microsoft can price the Surface for $199 and make a profit. Here's how

2012-Aug-16 | Tags: analysisbenchmarksurface-rt

Windows on ARMEveryone has focussed on the headline price tag for Microsoft's forthcoming tablet, and forgotten about the alternative ways that exist to get customers to pay for things they buy.

A Microsoft Surface for $199? Everyone is aghast. The news has leaked (perhaps intentionally) from a Microsoft event. Everyone is aghast, or agape. That's the same sort of price as a Nexus 7! Also: it will destroy the market for OEMs who want to make ARM tablets running Windows 8, who will have much higher prices, because they don't have billions in the bank, unlike Microsoft.

Microsoft Surface RT

If you do the maths, then it certainly seems to make no sense. Microsoft can't possibly make any money if it sells a Surface - a 10in tablet with much of the functionality of a PC, and certainly with the guts at least equivalent to an iPad, which sells (in the US) for around $399.

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Windows on ARM - Windows RT