Microsoft starts Surface Pro tablet pricing at $899

Will enterprises buy a tablet that costs $400 more than a consumer tablet?

Microsoft on Thursday set pricing for its Surface Pro 10.6-inch tablet with a starting price of $899 for a 64GB version and $999 for a 128GB version.

The tablet, formally called Surface with Windows 8 Pro, will ship sometime in January. No pre-orders were available in the blog announcing the pricing, which was posted by Panos Panay, general manager of Microsoft Surface.

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Neither version will come with the Touch Cover or Type Cover, which would add at least $120 to the total cost.

Two analysts said Microsoft must have set the pricing that high to allow its partners making Windows 8 tablets to charge less. Microsoft is concerned about maintaining a good relationship with its partners, who must buy Windows 8 licenses from Microsoft and then build the tablets. Microsoft has never made a tablet before releasing the Surface for Windows RT tablet a month ago.

Compared to consumer-focused tablets, the Surface Pro prices are at least $400 higher. The iPad starts at $499, while some are less than $200.

"The Surface Pro pricing leaves room for device makers to come down in price without compromising margins too much," said Carolina Milanesi, an analyst at Gartner. "This is an enterprise play, not a consumer play, at least for now."

Jack Gold, an analyst at J. Gold Associates, said enterprise customers are "less prices sensitive" and also predicted that competitive products from other vendors will undercut the Surface Pro pricing "in the not-too-distant future."

Still, Gold added: "Is the price high? Yes."

Surface Pro runs an Intel Core i5 processor, while Surface for Windows RT and other RT tablets run ARM-based chips. Panay called attention to the Surface Pro's pen input, which he called "an amazing feature for all you note-taker or document editors out there." Surface Pro also has a full size USB 3.0 port.

Aside from the processor difference, the Surface Pro will run Windows 7 desktop applications. "It's a full PC AND a tablet," he said. Milanesi said that it might have been better for Microsoft to build a Surface Pro that was closer in design to a laptop than a design that tries to be both a tablet and notebook/laptop.

"Of course cheaper is better and also a design that might be closer to a notebook -- one where the base is heavier -- but around $700," Milanesi said.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at  @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

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This story, "Microsoft starts Surface Pro tablet pricing at $899" was originally published by Computerworld.

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