I just wrapped up an argument in which I said that Amazon kicked off the $200 tablet market, Microsoft will enter it but, ultimately, Apple will win the battle. Apparently I’m not the only one who thinks Microsoft could be in trouble by launching a Windows RT-powered tablet in the $200 price range. Forrester research analyst Sarah Rotman Epps recently told Wired that it would be a suicidal move on Microsoft’s part to launch a device in that range — even if Microsoft has the cash to do so.
“Could [Microsoft] afford to do it? Yes, they have tons of cash, they can do whatever they want,” Epps told Wired in a recent interview. “But it would be suicide. In one fell swoop, they would handicap their partners, and it would prevent them from releasing higher-priced products. That pricing would be suicide. Nothing about that strategy makes sense.”
It really doesn’t make sense. In fact, Toshiba, Acer and HP have already decided not to launch tablets running Windows RT and powered by ARM processors. Each will focus instead on Microsoft’s more powerful Windows 8 operating system and deploy pricier devices.
Rhoda Alexander from IHS iSuppli is on the same boat. “Frankly [Microsoft would] be leaving money on the table,” Alexander argued. “There’s an opportunity to charge significantly more for the product, and it doesn’t make sense that they would put a bargain basement price on it out the door. If they give the device away or sell it at a loss, it’s difficult to see where a profit opportunity comes from. Can it be done? Yes. Should it be done? Questionable… You set the bar really low and set customer expections really low. It’s very different than the Android universe, where pricing is already in that ballpark. Microsoft has a chance to write something new here.”