Surface Pro pricing: Positioned like a tablet, built like an Ultrabook

The Surface Pro is doomed. Or so it would seem, given the announced prices of $899 (64GB storage) and $999 (128GB storage.) How does the new Surface Pro pricing really compare to the competition?

The most expensive iPad, the 64GB model with both Wi-Fi and LTE support, costs $829. That means the 64GB Surface Pro commands a $70 price premium compared to the iPad. The $829 iPad does offer mobile broadband, something the Surface Pro lacks. However, the Pro has a USB 3.0 port, a Micro-SDXC card slot, and DisplayPort connector. Microsoft also includes a stylus, useful for artists or handwriting recognition. Apple doesn't offer a 128GB model, so the Pro has an edge in capacity, if you're willing to pay more.

Comparing the Surface Pro to a high end Android tablet reveals a greater variation in pricing. That's because Android tablets tend to offer more memory for the dollar than Apple's iPad. The Google Nexus 10, for example, costs $499 for 32GB; same for the Samsung Galaxy Note 10.1, which has a digitizer like the Surface Pro, for pen input; and for the Asus Transformer Pad Infinity. Of those, however, only the Asus has a 64GB version, priced at about $600, and costs another $150 for the keyboard docking station that adds a USB port, SD card reader, and extra battery. At $750 total for that package, Surface Pro does cost more; but then again, Surface Pro should deliver better performance and greater versatility.

It's worth noting that the iPad doesn't run MacOS apps, and the Asus runs Android apps only. Surface Pro will run all Windows 8 apps, be they in desktop mode or for the “modern” Windows apps interface.

Overpriced tablet or underpriced ultrabook?

As a tablet, Surface Pro doesn't seem massively overpriced, but it's still at the high end. But if you dig into the specs, it doesn't really sound like a tablet. The guts of the pro consist of a Core i5 CPU, 4GB of RAM, USB 3.0 port, flash memory card slot, and even a mini-DisplayPort connector. The Surface Pro sounds more like an Ultrabook with touch and pen, but without a keyboard. In fact, if we harken back to Bill Gates' vision of the Tablet PC, the Surface Pro sounds like the ultimate iteration of that idea: a PC that's a tablet. ( See PCWorld Archives from 2001: Gates unveils portable tablet PC)

The Surface Pro has more in common with the plethora of hybrid laptops that arrived with Windows 8. Minor differences exist, such as the Pro offering a single USB port. Consider a system like the Acer Aspire S7, which uses a Core i7 processor, also has a 1080p display and weighs 2.8 pounds. The Surface Pro (2 pounds), with a Microsoft Type Cover (.55 pounds) will weigh less than the S7, but you'll have nearly the same performance.

Surface Pro's pricing is actually very appealing in light of the pricing for some other Windows-based tablets. The current Samsung Series 7 Slate boasts a slightly larger display (11.6 inches to Surface Pro's 10.6 inches) and starts at $1149 for a Core i5 system with 128GB of storage, 4GB of memory, and a keyboard. (See Related: Samsung pricing sets the stage for other Windows 8 tablets) Meanwhile, Microsoft's own Surface RT, which runs on an Nvidia ARM CPU, costs $699, including Microsoft's Touch Cover.

Marketing rears its ugly head

A strong case can be made that the Surface Pro is just an Ultrabook sans keyboard, and plus a pen. But Microsoft isn't marketing it as a PC or Ultrabook, but as the Surface Pro. Naming and segmentation are important, because how a company markets a product indicates how it wants the world to see a product.

The Surface RT is the first product shipping to bear the Surface name. (We'll conveniently ignore the big Surface tabletop PCs for the moment; those were never more than narrow niche products.) No one questions whether the Surface RT is a tablet. It's priced like a high-end tablet and it's thin and light like most tablets of its size, with competitive battery life, too. But since the Surface RT uses Nvidia's ARM-based Tegra 3 processor, you can't run your desktop apps on the tablet.

Image: Microsoft.com

There's a danger that the Surface Pro will be viewed the same way. If Microsoft says it’s a tablet, then it must be a tablet. At the prices Redmond is charging for the Pro, people shopping for actual tablets—and not paying close attention at specs—will probably ignore the Pro, on price alone. Then again, it's not just about price.

Surface Pro ecosystem

The vast lead Apple and Android have in the app ecosystem currently is also a huge draw for users. Potential tablet buyers are unlikely to consider that vast array of Windows desktop applications, either, since Redmond is busy touting milestones for its Windows Store apps. And 20,000 store apps sounds pretty marginal compared to the nearly 730,000 iOS apps and more than 570,000 Android apps.

Serious PC users, who recognize the Surface Pro for what it really is—a thinly disguised PC—may pick one up. I'm betting almost all those users will also pick up the Type Cover at a minimum, and maybe a full Bluetooth keyboard. Corporations interested in tablets might also view the Surface Pro with interest, since Microsoft has integrated the enterprise management capability into the system, just like any business PC. They'll be able to install all the software their corporate users want as well, since it's a full-blown Windows PC under the hood.

In the end, calling this product a Surface may be what kills it, not the product itself. The Surface Pro looks to be an impressive little PC for running Windows 8. But if potential buyers perceive it as just a high-priced tablet, Microsoft could end up with a lot of excess inventory and a lot of egg on its face at the next shareholders meeting.

(Additional reporting by TechHive’s Melissa J. Perenson)

For comprehensive coverage of the Android ecosystem, visit Greenbot.com.

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