Microsoft Surface Tablet to Sell for $199: Report

A new report suggests that Microsoft's upcoming Windows 8 RT-based tablet computer, Surface, will retail for $199. Observers expect that such a price point is more likely to place Microsoft in direct competition with Google than with Apple.

The report comes from the prominent tech blog Engadget. It states that the basic version of the 10.6-inch Surface, running on Microsoft's bare-bones Windows 8 RT (or runtime) operating system (OS), will cost $199. (Source: engadget.com)

That's the same price as Google's recently released 7-inch Nexus 7 and the similarly-sized Kindle Fire from Amazon. It's also within range of the slightly less expensive Barnes & Noble Nook Tablet. (Source: latimes.com)

$199 a Killer Price for 32GB Tablet

Many observers consider this bad news for Google, Amazon, and Barnes & Noble because the Surface allows users to choose a storage capacity of either 32GB or 64GB -- considerably more storage than is currently available on those rivals' devices.

Although the Engadget report does not make clear which version of the Surface will retail for $199, insiders expect it will be the 32GB edition. The 64GB version is likely to be priced closer to $249.

It remains unclear whether a $199 Surface tablet will have a dramatic impact on sales of Apple's iPad, which retails for twice that price.

New Versions of Surface Coming in 2013

Microsoft plans to release 64GB and 128GB versions of the Surface running a standard version of Windows 8 later on, perhaps early next year.

These devices could retail for substantially more than $199. However, it's unlikely Microsoft will price them anywhere near the iPad's lofty $499 price point.

Microsoft's pricing strategy for its new Surface tablet now appears aimed at carving out a substantial chunk of the tablet market.

But that won't be easy, as the Apple product has established itself as a consumer favorite. According to another new report, the iPad now accounts for 70 per cent of sales in the tablet market. (Source: computerworld.com)

The Microsoft Surface tablet running Windows 8 RT will hit store shelves in late October, 2012.