Explaining Microsoft Surface Price

[heatlesssun]

We're glad you're here to shed just a little of your holy light upon us. Thanks for acting as the guiding beacon in a belief system based on touch. You should give it a catchy name like "Smudgism" or something so simple minded people here who don't use MS Office professionally like you do can have a better chance at mental categorization of the many nuances and finer points they don't yet comprehend.

Thank you for being a relentless troll with nothing to add to the conversation.

 

[wonderfield]

I thought he was being sarcastic.

I don't think so, no. His second comment was basically accurate.

 

[MrCrispy]

The Pro has an extremely niche market - IT admins, devs, design pros who need to be mobile and need a full pc + tablet, and have disposable income/paid by work. For that class of user, there's nothing else that matches the Pro specs, and the price is justifiable.

For everyone else, it is a total failure, mostly because they don't need this much computing power in this form factor. And that's the big problem, because everyone still views it as 'just another tablet'.

 

[Topweasel]

I nominate this as the most nonsensical response of the day. For many years people have bought Windows tablets to do exactly what I listed.

Hmm. That response wasn't to you. It was to the guy that brought up a couple higher-end options and capabilities just to try to be more difficult. Eventually as the user base increases software made for Windows 8 and accessories for the pen support on the tablets will be available for the Niche markets.

 

[SkribbelKat]

Thank you for being a relentless troll with nothing to add to the conversation.

I was agreeing with you and offering my unique perspective on how you can improve this forum so it lives up to your standards. Don't blame me when you die of thirst right next to the trough I just put you next to.

 

[pelo]

Don't we already have the answer to why it's so expensive?

A teardown of Microsoft's new Surface RT tablet suggests that it generates a healthier profit margin than Apple does with its low-end iPad.

The teardown, carried out by IHS iSuppli, the Surface RT (32GB) tablet carries a bill of materials of $271, and an additional $13 manufacturing costs. This brings the total cost of manufacturing to $284.

The most expensive component is, as expected, the screen, which costs Microsoft an estimated $101. The 32GB NAND storage and the 2GB DRAM adds another $34 to the cost, and the Nvidia Tegra 3 processor another $21.50.

It's just MS attempting to sell themselves much like Apple without anyone actually buying =P

 

[Topweasel]

The Pro has an extremely niche market - IT admins, devs, design pros who need to be mobile and need a full pc + tablet, and have disposable income/paid by work. For that class of user, there's nothing else that matches the Pro specs, and the price is justifiable.

For everyone else, it is a total failure, mostly because they don't need this much computing power in this form factor. And that's the big problem, because everyone still views it as 'just another tablet'.

It has the same market value as a Ultrabrook or MBA. More so in some ways.

 

[Topweasel]

Don't we already have the answer to why it's so expensive?

It's just MS attempting to sell themselves much like Apple without anyone actually buying =P

The Topic was Pro pricing and not RT pricing. RT pricing actually has been pointed directly at OEM pressure, even then one of their partners (Asus) was forced to reduce price $100 just prior to release.

Lot more wiggle room in the i5 Ultrabook market. $900 is pretty damn competitive considering specs.

 

[pelo]

It has the same market value as a Ultrabrook or MBA. More so in some ways.

People haven't exactly been flocking to Ultrabooks either. In fact, they're not selling well at all, and for much the same reasons people won't flock to the Surface Pro: poor battery life, high cost, "meh" processing power and not all that thin/light compared to a tablet. Adding a touchscreen to that model only adds to the price

 

[MrCrispy]

And btw, tablets are completely overrated. They have a place, and that place is casual use - which is why the iPad exploded. The idea that a pro photographer will be using Surface to run Photoshop, vs doing it on his laptop/pc/ultrabook, which all cost less, esp when he's also lugging around expensive and heavy camera equipment, is frankly ridiculous.

There's this grand vision that tablet computers are going to take over the world and its total nonsense. People said smartphones would replace their laptops/pc's, and that didn't happen. It'll be the same story for tablets. Touch is highly overrated for any real work.

 

[pelo]

The Topic was Pro pricing and not RT pricing. RT pricing actually has been pointed directly at OEM pressure, even then one of their partners (Asus) was forced to reduce price $100 just prior to release.

Lot more wiggle room in the i5 Ultrabook market. $900 is pretty damn competitive considering specs.

No it isn't. People aren't buying Ultrabooks in droves, what in the world makes you think they'll flock to the Surface Pro?

Is it cheaper? No. In fact, it's quite expensive.
Does it offer better battery life? No. It's actually worse.
Is it lighter/thinner than other tablets? No.
Is it lighter/thinner than other notebooks? Yes, but that hasn't been selling well (see shitty Ultrabook sales figures and super slim margins)

It's a niche product for a very small crowd. Jumping on an Ultrabook bandwagon isn't going to spur sales when Ultrabooks themselves are falling well below expectations

 

[MrCrispy]

It has the same market value as a Ultrabrook or MBA. More so in some ways.

Ultrabooks give you a much wider range of choices, and esp larger screens. And they still don't sell well. They are just not good value compared to regular laptops, which are getting faster and lighter every day. The lines are blurring. And I don't need accessories to work on a MBA, I do need them with the Surface. Unless you really need a tablet, and most pros don't, its not going to sell.

 

[heatlesssun]

Hmm. That response wasn't to you. It was to the guy that brought up a couple higher-end options and capabilities just to try to be more difficult. Eventually as the user base increases software made for Windows 8 and accessories for the pen support on the tablets will be available for the Niche markets.

I was agreeing with you and offering my unique perspective on how you can improve this forum so it lives up to your standards. Don't blame me when you die of thirst right next to the trough I just put you next to.

My bad.

 

[wonderfield]

Unless you really need a tablet, and most pros don't, its not going to sell.

Accurate. I'm only interested in one because I'm finding myself in more scenarios where I'd like to be able to get some work done, but I can't imagine ever abandoning my tablet for a notebook (unless it's something at the very high end of the scale, like a MBPr), I find the idea of owning both a little bit silly from a cost perspective, and I'm 'okay' with trade-offs like battery life, performance and weight. I also like to dabble with Microsoft hardware from time to time, as they seem to do a pretty solid job on the hardware side of things when they get the software equation right. Many hardware vendors...don't.

There aren't many people like me. The Surface Pro only makes sense when all of those things add up, and they just don't for most people. Given that, the price seems reasonable — limited market; premium price. Par for the course. Touch Cover/Type Cover pricing is another matter entirely.

 

[heatlesssun]

And btw, tablets are completely overrated. They have a place, and that place is casual use - which is why the iPad exploded. The idea that a pro photographer will be using Surface to run Photoshop, vs doing it on his laptop/pc/ultrabook, which all cost less, esp when he's also lugging around expensive and heavy camera equipment, is frankly ridiculous.

Though small, there is a proven market for tablets like the Pro. There's far more certainty about how this device will sell than the Surface RT because it is such an old market. I think people look at these Surface devices and think that Microsoft is trying to sell zillions of them when that's really what it's about. They are about creating designs that people talk about and will remember, even if they don't like them. There's been more discussion about the Surface RT and Surface Pro in the last six months than all other Tablet PC devices put together in the last decade.

What is a PC? What do people think of when the term PC is used? Probably some generic thing may by whomever that's cheap and full of plastic. PCs have no identify. Even if the Surface isn't a big commercial success for the first time in a long time there are Windows computers that many will recognize with a simple name. There is an identity attached to PCs beyond the cheapest of junk.

 

[MrCrispy]

I think they figure for the niche market who will buy the Pro, the added price of the cover is not a deal breaker. They've already committed to the Pro, and there's nothing else that meets their needs. So in a sense its added profit.

The price of the cover for the RT IS a problem though.

 

[MrCrispy]

Though small, there is a proven market for tablets like the Pro. There's far more certainty about how this device will sell than the Surface RT because it is such an old market. I think people look at these Surface devices and think that Microsoft is trying to sell zillions of them when that's really what it's about. They are about creating designs that people talk about and will remember, even if they don't like them. There's been more discussion about the Surface RT and Surface Pro in the last six months than all other Tablet PC devices put together in the last decade.

What is a PC? What do people think of when the term PC is used? Probably some generic thing may by whomever that's cheap and full of plastic. PCs have no identify. Even if the Surface isn't a big commercial success for the first time in a long time there are Windows computers that many will recognize with a simple name. There is an identity attached to PCs beyond the cheapest of junk.

Yes, its the same market that was served by TabletPc's, which were quite successful in their segment. But the RT/Pro live in a world of iPad's and Nexii. and will be compared to them, no matter what the intentions or target market may be. This public perception has the power to derail the whole brand. After all, there was nothing wrong with the Zune - an excellent product offering more features at a lower price. Yet it failed because of perception (and partly due to MS's stupid internal politics) and inability to support a product, a problem MS seems to have.

Maybe MS is hoping they can take the losses on Surface/WP8/Win 8 till touch becomes the norm and Win 8 is the standard. They sort of did this with Xbox, sold it at a huge loss until years later when it became the leading console.

 

[Kranium]

Accurate. I'm only interested in one because I'm finding myself in more scenarios where I'd like to be able to get some work done, but I can't imagine ever abandoning my tablet for a notebook (unless it's something at the very high end of the scale, like a MBPr), I find the idea of owning both a little bit silly from a cost perspective, and I'm 'okay' with trade-offs like battery life, performance and weight. I also like to dabble with Microsoft hardware from time to time, as they seem to do a pretty solid job on the hardware side of things when they get the software equation right. Many hardware vendors...don't.

There aren't many people like me. The Surface Pro only makes sense when all of those things add up, and they just don't for most people. Given that, the price seems reasonable — limited market; premium price. Par for the course. Touch Cover/Type Cover pricing is another matter entirely.

Wow someone who understands that things can be manufactured without the intent of selling in the billions of units (a la a Ferrari, a Patek watch, etc).

I know it boggles the mind but SOMEONE buys the $2799 MacBook pro listed on apples site. Enough apparently, that that model exists at all. If I bought a $2000+ vaio laptop, a $899 tablet seems about right. Microsoft I'm sure sent untold thousands or even million on market research before going on this venture.

 

[pelo]

Maybe MS is hoping they can take the losses on Surface/WP8/Win 8 till touch becomes the norm and Win 8 is the standard. They sort of did this with Xbox, sold it at a huge loss until years later when it became the leading console.

They aren't selling them at a loss, though. The exact opposite is happening, and MS is selling them at sky high prices and high margins. That's not the recipe to market penetration. If MS was looking to follow their Xbox model then they'd have taken an Android/Google Nexus approach and sold them at low prices and make up the rest via apps, ads, and services. Instead we've gotten an RT tablet with mediocre hardware and an Apple-like price tag.

Personally, I'd have liked to see MS compete on both fronts. A better SoC coupled with a lower price tag would have been great. Certainly better than high price tag and crappy performance

 

[pelo]

Hell, even Apple isn't that brazen. They may charge an arm and a leg, but at least their SoCs are second to none and their performance tops the charts. MS seems to be selling a gilded turd and wants to convince you that it doesn't stink

 

[heatlesssun]

Yes, its the same market that was served by TabletPc's, which were quite successful in their segment. But the RT/Pro live in a world of iPad's and Nexii. and will be compared to them, no matter what the intentions or target market may be.

The target market of a device like the Pro know all about iPads and Android tablets and those devices, that's why they would be something like the Pro.

This public perception has the power to derail the whole brand. After all, there was nothing wrong with the Zune - an excellent product offering more features at a lower price. Yet it failed because of perception (and partly due to MS's stupid internal politics) and inability to support a product, a problem MS seems to have.

The Zune isn't Windows though. For instance, Windows 8 isn't going to suffer from a lack of support.

Maybe MS is hoping they can take the losses on Surface/WP8/Win 8 till touch becomes the norm and Win 8 is the standard. They sort of did this with Xbox, sold it at a huge loss until years later when it became the leading console.

Again, it is about establishing an identity for Windows 8 and a vision of what a typical PC is besides the cheap clamshell laptop or generic black tower desktop. Microsoft never indented to sell tons of things as they can't with their current business model. Sure they'd like to more than less but the FAR more important thing is how Windows 8 devices, and RT to a lesser extent for now at least, do as a whole.

 

[heatlesssun]

They aren't selling them at a loss, though. The exact opposite is happening, and MS is selling them at sky high prices and high margins.

Didn't you say that ultrabooks don't sell at good margins? Margins on Surface RT are pretty good, I doubt that they are as good for the Pro however.

 

[pelo]

Didn't you say that ultrabooks don't sell at good margins? Margins on Surface RT are pretty good, I doubt that they are as good for the Pro however.

Yea, I think for the Pro it's actually going to be worse for MS. 1080p touchscreen, SSD, Ivy i5 and added cooling is going to cost quite a bit. ~$20 for a Tegra 3 compared to a ~$200 i5 is going to ruin their profit margins quite quickly

 

[heatlesssun]

Yea, I think for the Pro it's actually going to be worse for MS. 1080p touchscreen, SSD, Ivy i5 and added cooling is going to cost quite a bit. ~$20 for a Tegra 3 compared to a ~$200 i5 is going to ruin their profit margins quite quickly

So in other words the Pro doesn't have a sky high margin.

 

[pelo]

I wouldn't expect it to carry the same % margin as the RT, no. There's still probably some $$ made there, though.

When Acer and others complained of Ultrabook margins it was also due to sales and having to decrease the prices to even move the product. Thus it was more of a two-fold issue of poor sales figures leading to slim margins.

Neither helps MS here, though. I just don't understand why they didn't wait until the hardware caught up with their vision. Just wait a generation or two until Intel feels pressure from ARM to lower prices and margins, and by then they'd probably have reached the sub-5W level with decent performance as well. With the Pro it seems they're opting for a "fuck it" approach to battery life just to get the product out.

Early adopters get screwed, folks. Either wait for an AMD Temash/Kabini x86 tablet or the new Atom coming late 2013.

 

[Topweasel]

No it isn't. People aren't buying Ultrabooks in droves, what in the world makes you think they'll flock to the Surface Pro?

Is it cheaper? No. In fact, it's quite expensive.
Does it offer better battery life? No. It's actually worse.
Is it lighter/thinner than other tablets? No.
Is it lighter/thinner than other notebooks? Yes, but that hasn't been selling well (see shitty Ultrabook sales figures and super slim margins)

It's a niche product for a very small crowd. Jumping on an Ultrabook bandwagon isn't going to spur sales when Ultrabooks themselves are falling well below expectations

Whether they sell or not or whether they want a tablet experience are two separate things.

Compared to similar "thin and Light". It isn't that expensive. Maybe $50 more than a cheap Samsung or Acer.
Battery life isn't good, specially for a device expected to have a more random use time and places.
It's not lighter then other Tablets. But its not exactly a whole lot heavier and it is lighter that most mobile productivity devices.
There has been a move to thin and light. But still price sits above that. People generally are willing to save $200-$300 going with an over-sized plastic shell and a shitty screen. That said their is a market or the MBA wouldn't exist and Intel wouldn't be pushing forward into the third year of Ultrabooks.

 

[SkribbelKat]

So in other words the Pro doesn't have a sky high margin.

I'm really upset at some of the margins I've seen lately. Like this notebook:

Just look at all that wasted space in the margin at the top! Shameful!

 

[pelo]

There has been a move to thin and light. But still price sits above that. People generally are willing to save $200-$300 going with an over-sized plastic shell and a shitty screen. That said their is a market or the MBA wouldn't exist and Intel wouldn't be pushing forward into the third year of Ultrabooks.

Screen has nothing to do with Ultrabooks. A vast majority of Ultrabooks have the same shitty display that the "over-sized plastic" laptops do. Pixel count, sRGB spectrum, and brightness are not part of the Ultrabook requirements.

Battery life, too, suffers. Thin devices mean less space for a battery thus lower battery capacity.

Thin devices also mean higher thermals and more throttling - you'll see throttling in every single ULV CPU due to TDP constraints. What this means is that 17W is too little for the processor to stretch its legs, particularly the GPU portion which will throttle.

The prices for the ULV chips are the same as 35W chips.

You don't save much in the way of battery life either, considering most computing is done at idle. You can have a 100W chip in there, but if it idles at the same clock speeds and chews up the same power, you won't notice a difference in battery life (unless you're running at full tilt, like gaming)

The market for the MBA is called Apple. People will pay high prices for their products just because it's got an apple on it. Microsoft isn't called Apple and neither is Intel. In fact, nor are HP, Acer, Asus, Lenovo, and on and on Laptop sales are down 24% from Q3 last year. Hell of a job Ultrabooks are doing, no?

 

[Vicinity]

I'm really upset at some of the margins I've seen lately. Like this notebook:

Just look at all that wasted space in the margin at the top! Shameful!

That's the scribbling area. You can place as many cats up there as you can draw.

 

[heatlesssun]

Just look at all that wasted space in the margin at the top! Shameful!

But when you do a left margin analysis:

 

[SkribbelKat]

That's the scribbling area. You can place as many cats up there as you can draw.

Oh...if you put it that way...I like Skribbeling area. Where are my crayons?

But when you do a left margin analysis:

That is a small margin! I bet you could put a few cats in it though....just saying.

 

[Weenis]

I love all the arm chair CEOs who think they know better than a multibillion dollar industry.

Like one fucking guy is sitting around making all the strategic decisions based on opinion/conjecture alone. Not utilizing millions in research and personnel who have decades of experience. Microsoft isn't exactly a small business. They have shareholders to answer to, they make calculated decisions.

You guys make me laugh.

 

[B2BigAl]

I have been using windows 8 for a while now, the only time I see metro is when I reboot or I want to click on the calculator fast. I don't use start 8 or any of the other start button returning gimmick things. Windows starts I click on desktop and my computer pretty much works like it always has.

I don't at all see why people bitch and moan so much, win 8 is pretty great.

It's fine if all you do is dick around on Facebook and surf pr0n. If you actually use your computer for something productive like me, I'm a software engineer, its a fucking trainwreck.

 

[blitzkommando]

I love all the arm chair CEOs who think they know better than a multibillion dollar industry.

Like one fucking guy is sitting around making all the strategic decisions based on opinion/conjecture alone. Not utilizing millions in research and personnel who have decades of experience. Microsoft isn't exactly a small business. They have shareholders to answer to, they make calculated decisions.

You guys make me laugh.

Gee I love being able to go and buy New Coke, Pepsi Clear, and MS Bob. Oh, right. Everyone makes mistakes. Even companies who have held outright monopolies in their markets and that were backed by fervent and loyal customers. Just because a decision was calculated doesn't mean that they couldn't have used the wrong numbers to derive their solution.

 

[soulesschild]

It's fine if all you do is dick around on Facebook and surf pr0n. If you actually use your computer for something productive like me, I'm a software engineer, its a fucking trainwreck.

Uh I use my computer as a software engineer. I fail to see how Win 8 is any different than Win 7 other than a fancy pants UI when I press the windows key. Train wreck indeed

Otherwise, win+d = desktop and that's where I'm at most of the time.

Unless you know, you're a fail dev that doesn't use KB shortcuts

 

[heatlesssun]

It's fine if all you do is dick around on Facebook and surf pr0n. If you actually use your computer for something productive like me, I'm a software engineer, its a fucking trainwreck.

I've been working in Visual Studio 2012 extensively on my Windows 8 machines, not really that different than using Windows 7. What's something that you find is difficult to do in Windows 8 from your perspective?

 

[Globox]

well heatless is trolling the thread again, looks like its ruined folks

 

[heatlesssun]

well heatless is trolling the thread again, looks like its ruined folks

Yeah, these threads are so much better when people don't ask questions and or point out how things work for them. Yes, they are much better with mindless "Windows 8 sux" statements and name calling and personal attacks.

Seriously, you have nothing more to add to the thread than this?

 

[coldtortilla]

I don't see many if any core i5 tablets with 1080p screens available for less.

I really don't get why people bitch so much about this, it seems market competitive for the specs.

Agreed innovation doesn't come cheap.

 

[stealthy123]

It's fine if all you do is dick around on Facebook and surf pr0n. If you actually use your computer for something productive like me, I'm a software engineer, its a fucking trainwreck.

how so? I have seen nothing that makes it different than windows 7 other than metro, which I don't even have to fuck with.