Tablets are a tricky thing to price. People want to make sure they're getting the absolute best value out of the product, but don't want to pay an arm and a leg just to get their mobile computing on. Apple's iPad may be the best and worst example of tablet pricing by costing said arm and leg, but offering a customized software experience that seemingly pays for itself in time.
Microsoft's Surface will now have to do the pricing tango as it nears its launch with Windows 8. The company didn't announce a price for the Surface when it was unveiled which means that they still might be debating its cost. Recent rumors from Digitimes suggest that the tablet may be more expensive than many had hoped.
Digitimes's sources found that Microsoft will be outsourcing the manufacturing of the Surface to Pegatron Technology. They also found that the price for the tablet might be a little steep for some. At current estimates, the Windows 8 Pro-based Surface will be priced at $799 or above. The Windows RT-based model running on an ARM processor will be at least $599 or above.
Let's take a look at the Windows RT model first as it will ship with Windows 8 and act as direct competitor with the iPad. The Windows RT Surface will come in 32GB or 64GB variations so let's assume that the 32GB will be at least $599. A 32GB iPad will run you the same amount at $599, but you can also choose to buy the 16GB for $499. While hardcore users would definitely want the extra storage, regular tablet users would just be fine with 16GB and opt for the iPad in this case.
As for the Windows 8 Pro version of Surface, it's going to be more in line with Ultrabooks. The latest Ultrabook that can compare to the Intel Core i5 processor that's powering the Surface will cost anywhere between $799 and $1,000. The Windows 8 Pro version of Surface will be the better value because it's the most powerful tablet on the market, while being far more portable than the already portable Ultrabook.
With both models, Microsoft will have to prove that they can pull an Apple by convincing people that the software will make up for the hardware's initial price. Unfortunately, that was the main problem with Microsoft's Surface conference - they showed no software. Apple always shows software alongside their hardware announcement to build the hype up. Until Microsoft can hype up the Surface with exciting software, it will be hard to see its value against the iPad.