Why the Surface RT $349 Price Makes Sense: 10 Counterpoints

I’ve read a number of articles on the Surface RT device. With the recent price drop of the Surface RT to $349 and with Microsoft writing off $900 million related to Surface inventory, there has been a lot of interesting comments and opinions stated recently. Many of those opinions differ from my own. Most recently, I read Don Reisinger’s article, “Surface RT Tablet Price Still Isn’t Right: 10 Reasons Why.

Don’s article seemed to be to have a lot of comments that I differed from my opinion. Based on reading his article, it seems that Don is unfamiliar with the Surface RT.As such, I thought I’d write this article to address each of Don’s points.

While the premise of Don’s article is that the Surface RT price is still too much. He primarily seems to be stating why he thinks the Surface RT itself isn’t right. In fact, a lot of comments are made in the opening paragraph that are tough on the Surface RT. Here are some of the key points I see him making in his opening paragraph and my personal opinion on each:

>> “[The lower priced Surface RT] doesn’t deliver any new functionality or design features”

Let’s start by pointing out the obvious. This is not a new release of the Surface RT at a lower price. It is simply a cut in price. I’m not sure why this point was mentioned at the very beginning of the article. I’m not sure of any company that adds features on a current product when they cut prices. If anything, features get cut when this happens. This is simply a price reduction. If you want new features, then load the preview of Windows 8.1 onto the device and you’ll get a few good ones that we’ll mention later.

“The reality is the Surface RT is in deep trouble”

This is an interesting comment. I would actually agree that Microsoft likely produced way too many Surface RTs. The $900 million write off could imply there are millions of Surface devices sitting in inventory. In my opinion, if there are millions of Surface devices sitting in inventory, then Microsoft made the mistake last year setting quantities. I, like many others, stated that $499 for a Surface RT was too high. That put the price on part with the iPads. For an unproven device with very few apps available on release, sales were going to be limited. To make a splash in the consumer marketing, hey needed to come out notably lower than the iPad in price, and they didn’t. Even with better hardware for the most part, in the consumer space, price is important.

I would have liked to have seen them come out at $499, but then immediately do launch incentives to bring the price down. That would have given Microsoft the price point for the future, but still have been competitive in the near term.

I do believe the current inventory is an issue for Microsoft as they get ready to do an update to the Operating System. They need to get rid of the current inventory.

“It’s missing the key features that would make it a success.”

This is an interesting statement. I’m not sure what features Don is referring to. The Surface RT has the same, features than most of the competition. I’ve not found the SD card slot or the USB connection on the iPad yet. In fact, there is a humorous Dell commercial on television right now that points out features the iPad is missing.

“Microsoft is also pushing a more-powerful alternative in the Surface Pro”

The Surface Pro is a more powerful alternative. It is also a higher-end device that is not really aimed at the consumer market that buys iPads and cheap Android tablets. This is like saying that McDonalds shouldn’t sell a regular cheeseburger because they have the Quarter Pounder. This is basic product marketing and placement.

“It appears the company is simply trying to eliminate its extra supply before it cancels the tablet altogether.”

Wow! According to the article, it appears that Microsoft is going to cancel the Surface RT? I understand Microsoft needs to eliminate a lot of inventory. To go from eliminating a lot of excess inventory to having the product cancelled altogether is a huge leap. With an update to Windows coming in the next several months, it could just be that they need to clear out the old inventory to get ready for a new version targeting Windws 8.1.

I don’t know Microsoft’s plans, but if I had to speculate, I’d bet against them killing it in the near term. One of the reasons I heard for Microsoft building the Surface was to show the device makers that it could be done. Microsoft entered the market and put a high price on their device, which left an opening for other companies to do a device at a lower price and compete. By building a device, Microsoft showed their commitment to the platform. By keeping the price higher, they showed they weren’t going to simply stop out the hardware vendors, but rather allow the market to compete. Has Apple done this?

The first reason is that Microsoft needs a low-end, consumer tablet device. The RT devices

“The [Surface RT] tablet is still a loser for the vast majority of customers looking to jump into the tablet fray.”

Don ends his intro statement with this comment. I’m not sure what he bases this comment on. From what I’ve seen, most people that have used a Surface device continue to use it.

The 10 Points about how the Surface RT is Right

Don Presented 10 points that were supposed to be on why the Price of the Surface RT is still wrong. These are really about why he sees the Surface RT is being bad. In the following, I’ll present counter points addressing why the Surface RT is at a great price and why it is a viable device.

1 – Windows RT is a tablet device, not a desktop

Don’s first point was that “Windows RT is a hobbled version of Windows 8—an unpopular operating system.” Whether or not Windows RT is a hobbled version of Windows 8, or whether Windows 8 Pro is an extended version of Windows RT would make a debate in itself. The reality is that Windows 8 RT does not support application written for previous version of Windows. This is no different from the fact that an iPad was not built to support iMac applications.

The Surface RT is a tablet device aimed at consumers. It is not a Windows desktop computer. The model for Windows RT is not new. It is the same as used by Apple. The iPad has the same “hobble” question to answer. The difference is that Microsoft has an alternative tablet that gets around the change, granted at a premium price. Where’s the iMac tablet?

2 – The Price

Don indicates that the price isn’t a value, that price doesn’t matter, and that the product is a ‘dog’. While his point was price, he also mentions the design is unimpressive.

This Surface RT is aimed at a consumer market. In the consumer market there is example after example of where price does matter. Small price variants might be overlooked for perceived value in other areas, but overall, price is often a critical issue in a consumer market.

The price of the Surface RT is right. $299 would be better, but $349 is still a good price. When looking at the price, you need to make sure to also look at equal features. I see a number of people comparing the Surface RT to an iPad Mini. This is not a fair comparison because the screen sizes are different. The size of the device means that you really have to compare it to 10”+ device. That would be the full iPad. At this point, Surface RT is a better value.

I’ve heard rumors of smaller Surface devices. If Microsoft were to release a device with a 7 or 8 inch screen and thus compete directly with the iPad Mini, then it would make sense to have a lower price. For such a device, a $349 price point would be too high. Having priced the Surface RT at $349, they have created a price window of $199 to $249 for a Surface RT Mini. That price makes sense.

You also have to look at the hardware you are getting for that $349. This gets covered more within the next eight points.

The statement that the Surface RT has an unimpressive design is very subjective. The basic point is that a tablet is a screen you carry around and touch. There is only so much that can be done with the design of such a device. If you focus on the hardware, you have to be impressed with the kickstand that is built in. Additionally, while the commercials are a bit overbearing, the simply click keyboard that operates as a cover is also worth a kudo or two. I used a Samsung Series 7 slate with Windows 8 that I carry around with a keyboard that has a trifold case. The kickstand and click on keyboard cover are impressive, simple ideas.

3 – Surface Pro is the Better Product

Of course the Surface Pro is a better product! It is a more powerful machine. It is the equivalent of a notebook computer running the same internals for the most part. Both my Surface Pro and notebook have Intel i5 processors and similar amounts of RAM. The Surface Pro is the professional offering from Microsoft. You’d have to compare this to the iMac tablet from Apple rather than the consumer device, the iPad. (Oh, wait, there is no iMac tablet yet….).

The Surface Pro is aimed at a different market, so I’m not sure how it comes into play in talking about the Windows RT price being wrong at $349. The Surface Pro also dropped in price. It is a different device for a different audience, so I’m going to leave talking more about it for later.

4 – No Loss of Features!

Don indicated that Microsoft didn’t add any features when they dropped the price. I just don’t understand why a company would add improvements to a device when the focus is on lowering the price.

I believe the opposite should be stated. Microsoft dropped the price by 30% and didn’t remove any features. You still get the full Windows RT Surface, just for $150 less! The fact that Microsoft produced too many is good for consumers since the price will drop.

5 – Everyone Should Just Buy an iPad.

Don indicated in his fifth point that the Surface RT makes no sense because the iPad exists! It seems like Samsung, Microsoft, Amazon, and all the other players should go home. There is no point in anyone building tablets because the iPad is here and it has lots of applications. Amazon reported that Kindles and Kindle Fire tablets were both in its top 10 products. It seems that Apple isn’t the only multi-billion dollar company selling tablets in large numbers.

The competition in the tablet market is heating up. The features are increasing. Apple has a lot of work to do if they want to hold onto their market. Right now they still have strong marketing on the “app” story, but that deserves a closer look too. (and is covered later in this article)

6 – Comparing the iPad Mini to the Surface RT

I touched on this earlier. Comparing the Surface RT to an iPad Mini simply doesn’t make sense. Tablets need to be compared based on features and screen size. The Surface RT is more comparable to an iPad than an iPad Mini. If Microsoft comes out with a Surface RT device with an 8” or smaller screen, then we can start comparing to the iPad Mini.

7 Where’s the application support?

Don states that application support on Surface RT is “disappointing.” I have to assume he means the number applications that will run on Surface RT rather than the support offered by companies that have built applications for Windows RT.

The reality is that the Windows RT platform has fewer available applications than other platforms. Even Amazon’s Kindle platform has more applications available. Having said that, quantity isn’t always important.

My first question to people that say that Windows RT doesn’t have all the applications is to ask what application is missing that they want. I find that rather than answering this question, I get a response indicating that the applications for iPad look better.

The reality is that there are mqny programs that are not available for the Surface RT such as Instagram. Of course, this is a result of Instagram (Facebook) choosing not to port to Windows. If you look beyond the few high profile examples; however, you will tend to find that most of the top application used on the iPad are in fact available for the Surface RT. Additionally, regardless of which platform you review, you’ll find that it is generally a small percentage of the applications are driving most of the downloads and driving most of the revenue.

It is easy to say that the Windows Store is missing hundreds of thousands of applications that are available for the iPad. Is the lack of applications that nobody was downloading really an issue?

8 – Surface RT in the Enterprise

Don states that Surface RT has no corporate value. He even speaks for the corporate world in saying that we (I’m a part of that world) know that the Surface RT offers absolutely no value.

The simple fact that the Surface RT has Office applications kills the belief that there is ‘absolutely’ no value to a Surface RT device.

The Surface runs Windows RT. There is also a value to the enterprise by the very fact that applications can be written using the same programming languages that many companies already use. Those applications will be able to execute on the tablet as well as other Windows 8 machines. Just as with the iPad, with time the Surface will prove even more valuable in the enterprise.

9 – Cellular Connectivity is Overrated

It is easy to dismiss a surface because it doesn’t support 3G, 4G, or other cellular technologies. However, if you look around and you’ll find statistics that show that most iPads sold support only WiFi. If you have a WiFi connection, you have connectivity. The Surface device don’t support cellular, but based on the iPad statistics, it isn’t needed or wanted by most. To pay for a cellular plan on a tablet device is becoming overkill. The days of lacking WiFi connection are ending.

This argument against Surface RT might hinder a few, but statistics show it isn’t really an issue – or Microsoft would have included other options.

10 – A Surface Uses Lots of Storage for the Operating System

You can’t argue with the fact that the Windows RT operating system takes a lot of space. It does. It is a very robust operating system. Add things like Microsoft Office, and you can see why a lot of the storage is used. Having said that, if you compare free memory to free memory on devices, you’ll still find that the Surface RT is competitive. The lower-end Surface RT has 32gb versus the iPad’s 16gb. To negate the operating system, simply buy a 32gb Surface RT instead of the iPad 16gb device. You’ll have more room on the Surface and the price (after the drop) will still be less!

What’s the Point?

It really seems that a lot of people write articles based on what they’ve read and on speculation. You can build opinions this way, but it is better to look deeper and build opinions on something of substance.

To that point, I also want to add that I’m a geek, which will be even more obvious by my next few statements. I currently own a Surface device as well as two additional non-Microsoft tablets running Windows 8. My wife and kids use iPads. I also have a Nook Tablet (Android) as well as a generic Android tablet. I’ve worked with Kindles and have played with a number of other Android tablets. My primary work computer is a notebook running Windows 7 and my primary personal computer is a non-touch screen Windows 8 notebook. My cell phone is an Android device; however, I own a Windows Phone that I use for development.

I mention all of this hardware to make the point that I have interacted with Android, iOS, and Windows devices. I own all of them. I’ve not just read what is online, but I’ve gotten my own dirty finger prints on all of them. When I read articles bashing various technologies, my first question is often whether the writer has done more than simply touch the products they are talking about. In many cases it seems like they might not have even done that!

If you disagree with me, comment below or email me. I’d be curious to hear what you think!

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