Microsoft would likely lose money on each device, but gain speedier market penetration. Is that a strategic trade-off?
It is, if the goal is to spur developer interest: Such an aggressive price tag could earn Microsoft some "significant market share," says Tony Bradley at PC World. And quickly amassing a large audience would definitely "fuel developer interest," which is key to becoming a major and enduring player. As history's shown us, a large selection of third-party apps means more "adoption by businesses and consumers." The problem is, if you start at $199, "customers might balk at higher prices down the road."
Microsoft may have no choice: Pricing the Surface that low "might make sense" because Microsoft is showing up "very late to the tablet market that is already well-stacked," says Brad Reed at BGR. Consumers have been trained to accept the $200 price point, and Microsoft understands that it needs to "positively blow the market away" just to catch up to Apple or Google. A high-end device with a low-end price tag might do just that.