Microsoft Stockpiling Three Million Surface Tablets Though May Not Be Super Cheap $199 Price

Microsoft Surface Tablet Stock Amount Quantity

The IDC reckons the Surface tablets Microsoft announced in June won’t sell for $199, and Microsoft is stockpiling just three million of the devices. That’s a small amount, though Microsoft is launching with limited availability.

$199 for a Surface tablet? You may be out of luck

It’s strange how Microsoft builds a tablet — though make sure to call it a PC in front of the company — and then announces limited availability. Regardless of your feeling on Microsoft’s launch strategy, the company is stockpiling tablets according to the IDC.

Microsoft is aiming for just over three million units according to IDC analyst Bob O’Donnell, across Intel x86 and ARM variants. Surface comes in both: Surface for Windows Pro and Surface for Windows RT. The latter is an ARM device, running the feature-limited Windows RT.

O’Donnell seems to think Microsoft will sell through retail stores if its producing millions of devices, and not just Microsoft Stores. Microsoft plans to have over 70 of its retail stores throughout the U.S.

On the $199 pricing, O’Donnell estimated there could be a $599 outright price for a subsidized $199 price with a two-year contract. While that may sound unattractive, don’t forget Microsoft offers a $99 Xbox 360 console with a two-year contract. It’s more expensive than buying the console, but consumers can be tricked into thinking cheaper payments over 24 months mean the console is cheaper. And $15 per month is cheaper.

A Mixture

Though what could Microsoft get users to subscribe to? Office, no, because it’s bundled with Windows RT-enabled devices. Xbox Games? Maybe. Microsoft could get creative with an PlayStation Plus rival, where you may a set fee per month and get free and discounted games in exchange. Or Xbox Music perhaps. Zune’s dead; however, Xbox Music could rebrand the music subscription service Zune offered.

O’Donnell, however, admits paying a monthly subscription for a PC devices isn’t attractive. As I said just now, he think consumers will work out the cost and figure it’s an inflated cost.

It’s an interesting situation. Microsoft probably isn’t going to launch Surface at $199 — it would make a massive loss — and $599 for Surface for Windows RT would be on par with the 16GB Wi-Fi-only iPad. Though the Google Nexus 7 is just $199.

Published: Tuesday, August 21st, 2012 Last Modified: August 21, 2012

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