Will you buy Microsoft Surface Pro?

Last week, Microsoft released pricing on Surface tablets running Windows 8 Pro: $899 (64GB), $999 (128GB). Controversy followed, with the Apple Fan Club of analysts, bloggers, reporters and other writers fanning the flames of misinformation (as they so often do). These nitwits say Surface Pro is overpriced, because iPad costs so much less. But iPad is the wrong comparison to make. I say Microsoft prices Surface Pro against MacBook Air and ultrabooks, which makes loads of sense when looking at the chip architecture (x86, not ARM), configuration (similar to MBA for cost) and operating system (developed for desktop PCs not mobile devices).

I rebutted loony iPad comparisons with post "Microsoft Surface Pro is NOT overpriced". Compared to MacBook Air or ultrabooks, Surface is competitively priced, which was my point -- that and getting sensible analysis out there. But properly priced against competing devices isn't the same as being right for your budget or what you're willing to spend. Apple commands a premium brand, for which people pay more, happily. Then there is ultrabook, which didn't lift PC sales during second and third quarters as Intel and its OEM partners hoped. The costlier laptops simply aren't selling well. Ultrabooks' failure to wow foreshadows big, potential sales problems for Microsoft, which brand doesn't carry the same price premium as Apple's.

The question isn't "Will people spend $1,000 or more (with keyboard cover) for Surface Pro?" but "Who will pay $1,000 or more for a Windows 8 slate?" Does Windows command premium brand pricing? For the majority of buyers, my answer is "No". Take a look at US retail in the three weeks leading up to and including Black Friday. According to NPD, the average selling price for Windows laptops was $477. The cheapest Mac sells for $999, which sets the lowest number for ASPs. Globally, Apple laptop ASP was $1,356 during third quarter, as calculated from public financial filings. What does Microsoft sell to the average person that comes even close? Nothing. So how does Microsoft make the leap? I write this post in part to get answer from you, as potential buyers.

I draw a different line from Surface Pro -- not to iPad but to laptops of similar architecture, recognizing something else: The pen. Surface Pro extends Microsoft's 10 year-old Tablet PC concept, because there is a stylus. The input device is standard equipment, even when the keyboard cover is extra-cost add-on.

On Google+, Peter Sitterly responds to my pushback comparing Surface to iPad: "If typical consumers make these same wrong comparisons, then it will be a market failure. No amount of telling consumers that they're being stupid is going to solve Microsoft's marketing problems". But Microsoft telling consumers is the point. Presumably, like Surface RT, Pro will be sold exclusively at Microsoft Store, where the company controls the marketing and presents tablets in context of other products.

The Big Gotcha

People won't make iPad comparisons inside the company's shops. Microsoft's sales problem is much, much bigger. Consumers are more likely to compare Surface Pro to RT. That is the fundamental sales problem.

When shoppers go into Apple Store, there is no question the difference between iPad and laptops like MacBook Air. From pricing to form factor to user interface, differences are unmistakable. Surface is quite different. Pro and RT form factors are nearly identical, as is the Modern UI buyers will see. That makes distinguishing the benefits of one versus the other all the more difficult -- and that's exactly not what Microsoft should want for a new branded product.

Meanwhile pricing difference glares. Surface RT starts at $499, or 400 bucks less than Pro. Most buyers won't much notice or care about ARM versus Intel, and Microsoft Store sales staff and promotional materials will have to lay out the big difference: The ability to run legacy Windows applications. Is that worth spending $500 or more (when adding keyboard cover) and benefit easily presented as compelling. I'm not convinced.

Surface Pro: 10.6-inch ClearType HD Display with 1920 by 1080 resolution; Intel Core i5 processor and HD 4000 graphics; 4GB RAM; 64GB or 128GB storage; 720p front- and rear-facing cameras (meaning they're for video more than photos); accelerometer; ambient light sensor; compass; gyroscope; Wi-Fi A/N; Bluetooth 4; USB 3; Windows Pro 8. Dimensions and weight: 10.81 x 6.81 x 0.53 inches and just under 2 pounds. Price: $899 (64GB); $999 (128GB).

Surface RT: 10.6-inch ClearType HD Display with 1366 by 768 resolution; Nvidia T30 processor; 2GB RAM; 32GB or 64GB storage; 720p front- and rear-facing cameras (meaning they're for video more than photos); accelerometer; ambient light sensor; barometer; magnetometer; Wi-Fi A/N; Bluetooth 4; Windows RT. Dimensions and weight: 10.81 x 6.77 x 0.37 inches and just under 1.5 pounds. Price: $499 (32GB); $599 (32GB with keyboard cover); $699 (64GB with keyboard cover).

Granted, Pro has twice the memory and higher-resolution display, but form factors are nearly identical for devices with very different purposes. Surface RT competes with iPad, by features, function and price. Pro extends the Tablet PC hybrid concept and, as such, is priced against x86 portables not Android or iOS devices. Microsoft has to sell buyers on the benefits of the hybrid concept, which in many ways applies to cheaper-selling Surface RT, and paying premium price.

Better for Business?

John Reczniarek puts Surface Pro in business context:

For myself as a system administrator, I can have all my of administrator tools which only run in x86 whilst out of the office or even wandering around the office. I could get a phone call on the way to work and remotely connect via the proper VPN connectivity that isn't in the Surface RT, and resolve issues on my hour long trip to work. It brings proper security and gives Administrators like myself the ability to manage devices again. It's perfect for a business tablet because that's what it's designed to be!

I agree but that scenario presumes IT organizations will choose to spend at least $1,000 on Surface tablets. Reality is this: iPad came into businesses by the backdoor -- the so-called BYOD, or bring your own device, to work phenomenon.

"The Pro does something no other tablet does: Liberates tablets from only being able to run cheap crappy software purchased off app stores", BetaNews reader Joe Chan opines. "People don't realize the value because they're comparing it to existing products. Its value should become apparent after release when someone with a Pro is sketching on Full blown Photoshop with a stylus and the guy with an iPad is sketching on Photoshop Express with his finger. Or someone with a Pro is playing a PC quality game and someone with an iPad is cutting rope for the millionth time".

Is he right? Can Surface come into businesses BYOD, for one-thousand bucks? Will businesses choose Surface Pro, when Windows 8 laptops can be had for less?

You tell me. Please answer the poll above and give your reasons in comments below.

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