Every industry has a magic price. It changes with the industry as fads come and go, but it usually stays around the same spot for most of the time. Until Amazon launched the Kindle Fire at $199, it was unheard of to see a tablet selling for that little. Google joined the $200 club with the Nexus 7 and Microsoft is rumored to join soon.
A source speaking to Engadget said that Microsoft will be launching the Windows RT version of the Surface for only $199 on October 26. If you recall, October 26 is the same day that Windows 8 launches. Having a one-two punch of Windows 8 and a cheap tablet would do wonders for Microsoft's marketing of the device.
Microsoft reportedly detailed their plans for the Surface at their TechReady15 conference. The conference is a technical conference for Microsoft employees. Information relating to the launch of Surface would be undoubtedly broken there first and then disseminated among the mainstream press at a later date.
So what would a $199 Surface mean for Microsoft? It could get Microsoft into the tablet market in a big way. At that price point, people really only have two options - Google or Amazon. A Microsoft built tablet running Windows 8 would be a huge temptation for those wanting a cheap tablet that also has plenty of muscle.
The rumored price of $199 would probably not make any of Microsoft's OEMs very happy. Acer chairman JT Wang said that Microsoft needs to create a price chasm between Surface and their own products. A $199 price tag would definitely eat into the market share for Acer and others. It also wouldn't be limited to their Windows 8 tablets either. A cheap Surface would eat into the market share for Acer and others' Android tablets. Why go with a $500 Android tablet when you can go with a $199 Windows 8 tablet?
As always, none of this is confirmed yet. Microsoft has yet to actually release the official price for the Windows RT version of the Surface. They would be smart to at least say something about the price since it's only two months away from launch.