Ballmer suggests Microsoft won't be going aggressive on price with the Surface

Ballmer suggests Microsoft won't be going aggressive on price with the SurfaceMicrosoft has a lot going on right now, plus it's been quite a month for new hardware, which might explain why the company hasn't taken more heat than it has so far on the almost complete lack of any new info emerging regarding the Surface tablet.

The Seattle Times attempted to get Microsoft's top man Steve Ballmer to talk about it in a Q&A piece published over the weekend, but Ballmer wasn't giving too much away.

When asked directly whether Microsoft was planning to compete with the market-leading Apple iPad on price or on features, Ballmer wasn't taking the bait.

He started by emphasising that final pricing decisions hadn't yet been made, but his comments relating to the iPad gave some pretty strong hints as to the company's thinking:

“I think we have a very competitive product from the features perspective,” Ballmer responded. “I think most people would tell you that the iPad is not a super-expensive device.”

More revealing was his take on cut-price tablets such as the Amazon Kindle Fire and (we presume by extension) the Google Nexus 7: “(When) people offer cheaper, they do less. They look less good, they're chintzier, they're cheaper. If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle (Fire) to do their homework?

“The answer is no; you never would. It's just not a good enough product. It doesn't mean you might not read a book on it.”

In other words, the Microsoft Surface will be priced more like the iPad, and less like the Kindle Fire. But Ballmer's seemingly dismissive view of Amazon's take on tablets does make you wonder.

It's clear Microsoft is coming at the tablet market the way it always has: thinking of them as more fluid, mobile forms of the PC.

In the past, it's been battling against the direct opposite approach as personified by Apple and Google: that tablets are large-screened mobile devices.

But Ballmer's comments do raise concerns that it hasn't picked up on the emerging third vision that Amazon's mobile devices represent: hardware as service delivery vehicles. You have to wonder if he'll still be saying the same things a year from now when presented with the Surface's sales figures and market share stats compared with those for the Kindle Fire models.

Read more about: Windows 8Microsoft Surface ProMicrosoft Surface RT

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14 comments

blizzard7  Sep. 16, 2012 at 17:40

Anyone who thinks Microsoft can price a 10.6" tablet at $199 is in Cloud Cuckoo Land. Let's say Microsoft does price it at $199. Microsoft makes a loss on every tablet and Microsoft gets no licensing money from OEMs because no-one will buy an alternative that's double the price. It's a lose-lose situation.

I'd expect it to be $399 for the low-end 32 GB model with Microsoft Office RT bundled.

barrybarryk  Sep. 16, 2012 at 18:39

Me too, with the Pro models well into ultrabook territory, since they pretty much are ultrabooks with a detachable keyboard and a touch screen.

blizzard7  Sep. 16, 2012 at 20:30

Me too, with the Pro models well into ultrabook territory, since they pretty much are ultrabooks with a detachable keyboard and a touch screen.

Agree. With a Core i5 and flash memory, they are pretty much ultrabooks.

matt101101 / MOD  Sep. 16, 2012 at 21:35

I have to agree, you're both right. These Surface Tablets (well, the Pro version anyway) seem more like fully fledged laptops with the keyboard cut off. I mean, a 3rd Gen i5 is more powerful than most people's proper computer; it's more powerful than mine, that's for sure. Also, with SSD storage, they'll seem really "nippy" for doing pretty much anything. My SanDisk Extreme breathed new life into my 1st Gen i5 laptop, I think an SSD is the magic upgrade my PCs over the years have all needed :p.

satchef1  Sep. 16, 2012 at 22:04

But Ballmer's comments do raise concerns that it hasn't picked up on the emerging third vision that Amazon's mobile devices represent: hardware as service delivery vehicles. You have to wonder if he'll still be saying the same things a year from now when presented with the Surface's sales figures and market share stats compared with those for the Kindle Fire models.

I'm sure they have realised all of this; he acknowledged in the interview that the Kindle Fire has it's place, has it's audience and it's niche. Microsoft have an entirely different one. Niches are what the tablet market is all about for now - Apple own, and will continue to own, the bulk of the market until someone establishes a real competitor.

blizzard7  Sep. 16, 2012 at 22:05

I have to agree, you're both right. These Surface Tablets (well, the Pro version anyway) seem more like fully fledged laptops with the keyboard cut off. I mean, a 3rd Gen i5 is more powerful than most people's proper computer; it's more powerful than mine, that's for sure. Also, with SSD storage, they'll seem really "nippy" for doing pretty much anything. My SanDisk Extreme breathed new life into my 1st Gen i5 laptop, I think an SSD is the magic upgrade my PCs over the years have all needed :p.

I've resisted the constant price drops that SSDs have gone through so when I get a new machine, it'll seem much much faster. X)

Right now I'm still pootling along with a 160 GB 5,400rpm hard drive, that even has a 32 GB partition so I can dual-boot Windows and Mac OS X.

satchef1  Sep. 16, 2012 at 22:10

IMHO it's going to be the Atom tablets that prove the most interesting. Looking at machines like the Acer W500 from two years ago, and the advances made to Atom since then, I think there's every chance they'll be something special. It wouldn't surprise me to see them at the same price as ARM machines and pulling ~10-hour battery lives. Given they absolutely rape ARM chips in terms of processing power and will let you use full Windows instead of the nerfed RT, you'd have to be an idiot to buy an RT machine (assuming the price of producing an Atom tablet hasn't rocketed in the past 2 years).

blizzard7  Sep. 16, 2012 at 22:26

@satchef
I have to disagree with you there. ARM chips still consume about a third of the power of an Atom processor and cost much less. Intel has a ton of work to do here. As for being an idiot for buying the RT version, I'm sure I'm not the only one who doesn't need to run any legacy apps (I don't as I'm coming from a Mac), so why bother buying an OS which is bigger and less optimised?

satchef1  Sep. 16, 2012 at 23:00

Just basing my view off of the Acer W500 and the improvements made to Atom in the time since then. ARM machines are likely to bag more hours of battery life and be thinner, but the Atom machines are still going to have a very good run time (8-10 hours, 12-15 with a dock) while packing a much more substantial punch. RT machines are great if you're looking to replace an iPad (though be prepared for a serious deficit in apps at launch), but they'd hardly a replacement for anything other than the most modest of computing needs.

Obviously this might change over time as the Store develops (the iPad OS starting to see more powerful applications, tho nothing like at the level of x86 programs) and better software becomes available, though I wouldn't be surprised to see these ARM machines cut off from some apps at a point in the future to allow the development of more powerful applications. The alternative is ARM holding back the possibilities - if Adobe want to port Photoshop in all it's glory to WinRT they can be sure an ARM chip is going to have serious problems coping.

JanSt / MOD  Sep. 16, 2012 at 23:13

But Ballmer's comments do raise concerns that it hasn't picked up on the emerging third vision that Amazon's mobile devices represent: hardware as service delivery vehicles. You have to wonder if he'll still be saying the same things a year from now when presented with the Surface's sales figures and market share stats compared with those for the Kindle Fire models.

I'm sure they have realised all of this; he acknowledged in the interview that the Kindle Fire has it's place, has it's audience and it's niche. Microsoft have an entirely different one. Niches are what the tablet market is all about for now - Apple own, and will continue to own, the bulk of the market until someone establishes a real competitor.


Agree... Apple and, in a variation, Amazon are in a different business.

matt101101 / MOD  Sep. 17, 2012 at 00:19

But Ballmer's comments do raise concerns that it hasn't picked up on the emerging third vision that Amazon's mobile devices represent: hardware as service delivery vehicles. You have to wonder if he'll still be saying the same things a year from now when presented with the Surface's sales figures and market share stats compared with those for the Kindle Fire models.

I'm sure they have realised all of this; he acknowledged in the interview that the Kindle Fire has it's place, has it's audience and it's niche. Microsoft have an entirely different one. Niches are what the tablet market is all about for now - Apple own, and will continue to own, the bulk of the market until someone establishes a real competitor.


Agree... Apple and, in a variation, Amazon are in a different business.

Yes, the sale of digital content as opposed to the sale of hardware (especially Amazon).

Pondlife  Sep. 17, 2012 at 00:29

MS have definitely been trying hard to get into the digital content market though.

barrybarryk  Sep. 17, 2012 at 00:38

Yeah I mean it's not as if Microsoft have a digital store front of their own. The only difference is Microsoft doesn't have to sell hardware as the delivery vehicle, other OEMs will do it for them. The world and his dog are already hooked into Windows and Wintel will very quickly flood the market with Win 8 'Touch Enabled' computers (Tablets, Ultrabooks, laptops etc) conveniently an almost essential upgrade to get the most out of Windows 8 and one that actually requires new hardware.

blizzard7  Sep. 17, 2012 at 21:25

RT machines are great if you're looking to replace an iPad (though be prepared for a serious deficit in apps at launch), but they'd hardly a replacement for anything other than the most modest of computing needs.

Obviously this might change over time as the Store develops (the iPad OS starting to see more powerful applications, tho nothing like at the level of x86 programs) and better software becomes available, though I wouldn't be surprised to see these ARM machines cut off from some apps at a point in the future to allow the development of more powerful applications. The alternative is ARM holding back the possibilities - if Adobe want to port Photoshop in all it's glory to WinRT they can be sure an ARM chip is going to have serious problems coping.


Again have to disagree there. The reason the iPad is so successful is because most consumers use sod all of a computer's total capability. Get an iPad, and you'll find you rarely need to touch your computer. WinRT will be the same and as it mentions here WinRT has the advantage of being able to share C-sharp, C++, C, XAML etc. etc. for apps with the x86 versions, so porting isn't that much work.

Given that the mass market is at the $500/ £400 point, I fully expect WinRT to sell just as well as full fat Windows 8, which in turn, means that it will have a healthy app library, even by the end of this year.

If Atom was that good, Apple would've chucked it in the iPad a while ago, because Intel loves to bend-over backwards to please Apple.

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